Average Cost Method

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Average Cost Method Questions and Answers

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Discuss why inventory self-correcting errors should be corrected.
How does purchase of inventory affect financial statement?
How to calculate ending inventory using gross profit percentage?
Spangenberg Products manufactures computer cases. All material is added at the start of production and overhead is assumed to be incurred at the same rate as labor. Overhead is applied to each prod...
Eagle Fabrication has the following aggregate demand requirements and other data for the upcoming four quarters. Determine the cost of a chase strategy using hiring and firing. All shortages are lo...
Hull Company's record of transactions concerning part X for the month of April was as follows. Purchases Sales April 1 (balance on hand) 100 @ $5.00 April 5 300 4 400 @ 5.10 12 200 11 300 @ 5...
What is the definition of equivalent units of production?
Gregg Industries uses three operations in sequence to manufacture an assortment of flower baskets. In each operation, the same procedures, time, and costs are used to perform that operation, regard...
Eighty units of end item E are needed at the beginning of week 6 and lead-time for E is 2 weeks . Ten cases (30 units per case) of J have been ordered and are scheduled to arrive (receive) in week...
As of January 1, 2017, Tamarisk Inc. adopted the retail method of accounting for its merchandise inventory. To prepare the store's financial statements at June 30, 2017, you obtain the following d...
Coronado Football Shop began operations on January 2 2017 Th e following stock record card for footballs was taken from the records at the end of the year A physical inventory on December 31 2017 r...
Problem 8-11 Richardson Company cans a variety of vegetable-type soups. Recently, the company decided to value its Problem 8-11 Richardson Company cans a variety of vegetable-type soups. Recently,...
Shamrock Corporation began operations on December 1, 2016. The only inventory transaction in 2016 was the purchase of inventory on December 10, 2016, at a cost of $22 per unit. None of this invento...
Sun Company is trying to determine the value of its ending inventory as of March 31, 2014, the company's year-end. The following transactions occurred, and the accountant asked your help in determi...
Co. Took a physical count of its inventory on December 31. In addition, it had to decide whether or not the following items should be added to this count. (a) Merchandise on hand had been sold earl...
Planning an Inventory Audit You will analyze a company's current inventory setup and determine the course of action to take to audit the client's inventory. In order to successfully audit inventory...
Consider the following requirements for a certain product. Beginning inventory = 500 units. Setup cost = $500 per setup. Lead time = 1 week. Holding cost = $3 per unit per week. (a) Develop th...
Suppose that Westside Auto, with D = 13,300 units per year, Ch = (2)(0.2) = $0.4, and Co = $30, decided to operate with a backorder inventory policy. Backorder costs are estimated to be $6 per unit...
Marina Sailboats reports income before income taxes of $80,000 during 2010. If beginning inventory was overstated by $7,000 and ending inventory was understated by $8,000, calculate corrected incom...
Thakin Industries Inc. manufactures dorm furniture in separate processes. In each process, materials are entered at the beginning, and conversion costs are incurred uniformly. Production and cost d...
Why is it important to track inventory from the point of ordering to the point of selling? How would you do this in QuickBooks?
Missing Amounts in Cost of Goods Sold Model For each of the following independent cases, fill in the missing amounts: Case 1 Case 2 Case 3 Beginning inventory ? $3,320 $2,550 Purchases (gross)...
Renka Shoe Company makes loafers. During the most recent year, Renka incurred total manufacturing costs of $25,400,000. Of this amount, $2,500,000 was direct materials used and $18,800,000 was dire...
In a department, 33,000 units are completed and transferred out and 14,400 remain in ending WIP at 85% complete. If an equivalent unit costs $7.00 for direct materials, what is the value of materia...
The Rudolph Corporation's inventory on December 31, 2014, was $325,000 based on a physical count before considering the following transactions: I) Merchandise costing $30,000, shipped f.o.b. shipp...
Kennel Company reported the following: Cost of goods sold (estimated for next period) $300,000 Ending inventory (estimated for next period) $95,000 Beginning inventory for the period $60,000...
On April 15, 2015, fire damaged the office and warehouse of Stanislaw Corporation. The only accounting record saved was the general ledger, from which the trial balance below was prepared. STANISL...
San Jose of southern Sonora state in Mexico makes a unique syrup using cane sugar and local herbs The syrup is sold in small bottles and is prized as a flavoring for drinks and for use in desserts....
Cooperative San Jos´┐Ż of southern Sonora state in Mexico makes a unique syrup using cane sugar and local herbs. The syrup is sold in small bottles and is prized as a flavoring for drinks and for use...
chain gang mass produces beaded necklaces. production occurs in three sequential production departments: stringing, clasping, and packaging. at the beginning of the period in clasping, 1,400 physic...
Background: In 2010 the Moncrief Company purchased from Jim Lester the right to be the sole distributor in the western states of a product called Zelenex. In payment, Moncrief agreed to pay Lester...
Sunspot Beverages, Ltd., makes blended tropical fruit drinks in two stages. Fruit juices are extracted from fresh fruits and then blended in the Blending Department. The blended juices are the
The local supermarket buys lettuce each day to ensure really fresh produce. Each morning any lettuce that is left from the previous day is sold to a dealer that resells it to farmers who use it to...
"I think we goofed when we hired that new assistant controller," said Ruth of Provost Department. "Just look at this report that he prepared for last month for the Finishing Department. I can't und...
Walton Company sells lamps and other lighting fixtures. The purchasing department manager prepared the following investment purchases budget. Walton's policy is to maintain an ending inventory bala...
Tots Toys Inc. manufactures a wooden model wagon. The departments are cutting, assembly and painting. Following is the information for the assembly department for the month of September 2013. Costs...
Drysdale Dairy produces a variety of dairy products. In Department 12, cream (transferred in from Department 6) and other materials (sugar and flavorings) are mixed and churned to make ice cream. T...
Presented below is information related to Dino Radja Company. Compute the ending inventory for Dino Radja Company for 2011 through 2016 using the dollar-value LIFO method.
Required: Calculate inventory amounts at the end of each year. On January 1, 2013, Avondale Lumber adopted the dollar-value LIFO inventory method. The inventory value for its one inventory pool o...
Fill in the partially completed inventory record shown here. Item: AB500 Lot Size Rule: L4L Lead Time: 2 weeks Parent: None Children: AB501, AB511, AB521
QUESTION 1 : A company purchased 100 units for $20 each on January 31. It purchased 100 units for $30 on February 28. It sold 150 units for $45 each from March 1 through December 31. If the company...
Allure Clothing. Inc. is a manufacturer of winter clothes. It has a knitting department and a finishing department. This exercise focuses on the finishing department. Direct materials are added at...
1. Taylor Ski Company manufactures snow skis. During the most recent accounting period, the company's finishing department transferred 4,150 sets of skis to finished goods. At the end of the accoun...
Griffin Watches, Inc., makes watches. Its assembly department started the accounting period with a beginning inventory balance of $25,000. During the accounting period, the department incurred $4...
A company's beginning Work in Process inventory consisted of 26,000 units that were 80% complete with respect to direct labor. A total of 96,000 were finished during the period and 31,000 remaining...
Kauai Store's inventory is destroyed by a fire on September 5, 2013. The following data for the year 2013 are available from the accounting records. Jan. 1 inventory $190,000 Jan. 1 through Sept 5...
During July 2014, Micanopy, Inc., sold 500 units of its product Empire for $8,000. the following units were available: A sale of 500 units was made after purchase 3. Of the units sold 200 came from...
Wilmington Chemical Company manufactures specialty chemicals by a series of three processes, all materials being introduced in the Distilling Department. From the Distilling Department, the materia...
Work in Hearty Soup Co. uses a process cost system to record the costs of processing soup, which requires the cooking and filling proces
Switch Co. manufactures a single product in one department. Direct labor and overhead are added evenly throughout the process. Direct materials are added as needed. The company uses monthly reporti...
Aussie Yarn Co. is a U.S. producer of woolen yarn made from wool imported from Australia. Raw wool is processed, spun, and finished before being shipped out to knitting and weaving companies. Mater...
Cullumber Company's record of transactions concerning part X for the month of April was as follows. Calculate average-cost per unit. Assume that perpetual inventory records are kept in units only....
In its first month of operations, Weatherall Company made three purchases of merchandise in the the following sequence: 1 180 units at $7, 2 480 units at $8, and 3 110 units at $9. Calculate the av...
Mercury Company has only one inventory pool. On December 31, 2013, Mercury adopted the dollar value LIFO inventory method. The inventory on that date using the dollar value LIFO method was $270,000...
Metlock Lumber Company handles three principal lines of merchandise with these varying rates of gross profit on cost. Please make the three answers clear and bold please! If you could can you under...
Leonard Bernstein Company began operations late in 2013 and adopted the conventional retail inventory method. Because there was no beginning inventory for 2013 and no markdowns during 2013, the end...
Floppy uses the period method and had the following inventory events during January: Date Units Purchased Unit Cost Date Units Sold Unit Sales Price Jan. 1 150 $7.00 Jan. 2 100 $10.00 Jan. 5 225 7...
Ohnson Corporation began 2016 with inventory of 12,000 units of its only product. The units cost $8 each. The company uses a periodic inventory system and the LIFO cost method. The following transa...
In 2013, Martin Company first adopted the dollar value LIFO method. Presented below is information related to Martin (round to the nearest dollar). (1) Compute the ending inventory for Martin Co....
Inventories are valued on a lower last-in , first-out (LIFO) cost or market basis. On August 31,2012 and 2011, inventories would have been greater by $1,897 million and $1,587 million, respectively...
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