Question 1

Calculate the inventory turnover at cost for Ricky's Department Store. The starting inventory at cost was $485,800 and the ending inventory at cost was $236,000. Cost of goods sold for the year totaled $2,670,660. (Round your answer to the nearest tenth)

Accepted Answer

A)  7.4 
B)  5.5 
C)  3.7 
D)  11.3

Question 2

Bulk Wholesalers took in $377,800 in sales during July. They started the month with inventory worth $173,800 and spent $299,900 on new purchases during the month. Gross margin on sales was 76%. Using the gross profit method, estimate the cost value of the inventory at the end of July.

Accepted Answer

A)  $90,672 
B)  $383,028 
C)  $473,700 
D)  $299,900

Question 3

Tim's Sporting Goods had net sales of $1,210,540 for the year. If the beginning inventory at retail was $322,800 and the ending inventory at retail was $412,600, find the inventory turnover at retail. (Round your answer to the nearest tenth)

Accepted Answer

A)  3.3 Times 
B)  4.1 Times 
C)  7.2 Times 
D)  10.4 Times

Question 4

Walker Manufacturing took in $206,500 in sales during October. They started the month with inventory worth $642,500 and spent $368,600 on new purchases during the month. Gross margin on sales was 66%. Using the gross profit method, estimate the cost value of the inventory at the end of October.

Accepted Answer

A)  $70,210 
B)  $436,000 
C)  $940,890 
D)  $1,011,100

Question 5

The After Five Boutique took in $748,200 in sales during May. They started the month with inventory worth $419,000 and spent $154,800 on new purchases during the month. Gross margin on sales was 40%. Using the gross profit method, estimate the cost value of the inventory at the end of June.

Accepted Answer

A)  $385,100 
B)  $124,880 
C)  $134,880 
D)  $724,250

Question 6

The current inventory turnover at retail for Johnny's Apple Shop is 2.8, based on net sales of $2,546,460. The published inventory turnover at retail is 4.2. Since the actual turnover rate is less than the published rate, find the target average inventory at retail.

Accepted Answer

The answer of The current inventory turnover at retail for...

Question 7

Determine the amount of the inventory for Fred's Appliances Co. using the lower-of-cost-or-market rule: $\begin{array}{llcc}
  \text {Fred's Appliances Co.  } &  \
 \text { Small Appliance Inventory } &\
\end{array}$

$\begin{array}{lllll}
\text { Description } & \text { Quantity } & \text { Cost } & \text { Market } & \text { Valuation Basis Amount } \
\hline \text { Toasters } & 30 & \$ 22.15 & \$ 23.50 \
\text { Coffee Makers } & 22 & \$ 18.95 & \$ 19.25 \
\text { Blenders } & 15 & \$ 15.50 & \$ 13.95 \
\text { Can Openers } & 36 & \$ 8.95 & \$ 8.80 \
\text { Hand Mixers } & 18 & \$ 11.15 & \$ 11.50
\end{array}$
 Total value of inventory: ________

Accepted Answer

The answer of Determine the amount of the inventory for...

Question 8

Cost of goods sold for Galaxy Manufacturers was $3,545,000 for the year. If the beginning inventory at cost was $950,250 and the ending inventory at cost was $735,875, find the inventory turnover at cost. (Round your answer to the nearest tenth)

Accepted Answer

A)  3.5 Times 
B)  1.9 Times 
C)  5.4 Times 
D)  4.2 Times

Question 9

Winston, Inc. had net sales of $754,800 for the year. If the beginning inventory at retail was $171,400 and the ending inventory at retail was $331,800, find the inventory turnover at retail. (Round your answer to the nearest tenth)

Accepted Answer

A)  1.5 Times 
B)  .8 Times 
C)  3.0 Times 
D)  1.9 Times

Question 10

Walker Manufacturing had 517 hot tubs in stock at the end of the year. Inventory records show the following information: $$\begin{array} { l l l l l } 
\text { DATE } & & \text { QUANTITY } & \text { COST } & \text { TOTAL } \
\hline \text { January } 1 & \text { B eginning } & 200 & \$ 6,307 & \$ 1,261,400 \
\text { April } 21 & \text { Inventory } & & & \
\text { July 24 } & \text { Purchase } & 350 & 5,194 & 1,817,900 \
\text { August 1 } & \text { Purchase } & 50 & 5,141 & 257,050 \
\text { December 8 } & \text { Purchase } & 50 & 5,512 & 275,600 \
\text { Total available for sale } & \text { Purchase } & 450 & 6,572 & 2,957,400 \
\hline & 1,100 & & \$ 6,569,350
\end{array}$$ Using the FIFO method of inventory pricing, calculate the dollar value of the ending inventory.

Accepted Answer

The answer of Walker Manufacturing had 517 hot tubs in...

Question 11

Becker Beverages Company had net sales of $320,000 for the year. The beginning inventory at retail was $65,620, a mid-year inventory amounted to $60,800, and the ending inventory was $63,300.
A)What was the average inventory for the year?
B)What was the actual inventory turnover rate at retail for the year?

Accepted Answer

The answer of Becker Beverages Company had net sales of...

Question 12

The inventory system in which goods available for sale is updated on a continuous basis by computer is called a(n) ____________________ inventory system.

Accepted Answer

The answer of The inventory system in which goods available...

Question 13

The Regal Plumbing Shop had 18 bathroom sinks in their ending inventory. The cost of each sink was $182.55. They valued this ending inventory at $3,238.56. If the lower-of-cost-or-market rule was used, what was the market price per unit of this inventory?

Accepted Answer

The answer of The Regal Plumbing Shop had 18 bathroom...

Question 14

Narrative 16-1
Use the information below for the following problems:
The following is the inventory for the year for Better Products, Inc.:
$$\begin{array} { l l l l } 
\text { Date } & \text { Units } & \text { Cost per unit } & \text { Total Cost } \
\hline \text { Beginning inventory, Jan. 1 } & 50 & \$ 85.26 & 4,263 \
\text { Purchase, April 15 } & 200 & 92.50 & 18,500 \
\text { Purchase, September 20 } & 140 & 91.50 & 12,810 \
\text { Purchase, December 15 } & 30 & 98.60 & 2,958 \
\hline \text { Total Units Available } & 420 & & \$ 38,531
\end{array}$$
-Refer to Narrative in your text 16-1 . When the manager of Better Products took physical inventory of his merchandise on December 31, it was found that 95 units were on hand. What is the dollar value of the ending inventory using FIFO?

Accepted Answer

The answer of Narrative 16-1
Use the information below for the...

Question 15

The inventory valuation method in which each item in inventory is matched or coded with its actual cost is the ____________________ method.

Accepted Answer

The answer of The inventory valuation method in which each...

Question 16

During the past year, Future Diner's sold 696 dining sets. Inventory records for the year are as follows:  Using the average cost method of inventory pricing calculate the dollar value of the ending inventory.

Accepted Answer

A)  $2,492,556.21 
B)  $1,925,317.76 
C)  $1,810,540.45 
D)  $1,726,441.08

Question 17

During the past year, Sweeter than Honey Inc. sold 920 beehives. Inventory records for the year are as follows:  Using the average cost method of inventory pricing, calculate the dollar value of the ending inventory. (Round your answer to 2 decimal places)

Accepted Answer

A)  $19,128.00 
B)  $28,772.00 
C)  $15,258.70 
D)  $22,541.80

Question 18

The number of times during an operating period that the average dollars invested in merchandise inventory was theoretically sold out is called inventory turnover.​

Accepted Answer

A) True 
 B)False

Question 19

Calculate the total number of units available for sale and the cost of goods available for sale from the following inventory: $$\begin{array} { l l l } 
\text { Date } & \text { Units } & \text { Cost per unit } \
\hline \text { Beginning inventory, Jan. 1 } & 600 & \$ 30 \
\text { Purchase, February } 18 & 1,200 & \$ 35 \
\text { Purchase, April } 10 & 1,250 & \$ 40 \
\text { Purchase, August 15 } & 1,700 & \$ 45 \
\text { Purchase, November 6 } & 1,500 & \$ 42
\end{array}$$ 
A)How many total units are available for sale?
B)What is the cost of goods available for sale?

Accepted Answer

The answer of Calculate the total number of units available...

Question 20

Wycombe Hobby Shop had a cost of goods sold for the year of $160,240. The targeted average inventory needed to match the industry standard is $48,200. What is the published industry standard for inventory turnover? (Round to nearest tenth)

Accepted Answer

The answer of Wycombe Hobby Shop had a cost of...

Exam 16: Inventory