Question 1

The formula for the average cost method of inventory valuation is as follows:
? $$\text { Average Cost Per Unit } = \frac { \text { cost of goods available for sale } } { \text { total units available for sale } }$$ ?

Accepted Answer

The formula correctly calculates the average cost per unit by dividing the total cost of goods available for sale by the total number of units available for sale, which is how the average cost method of inventory valuation works.

Question 2

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...

Question 3

Grand Department Store
July 1 − July 31 $\begin{array}{lll} 
& \text { Cost } & \text { Retal } \
\hline \text { Beginning Inventory, July } & \$ 205,850 & \$ 292,800 \
\text { Purchases } & \$ 448,600 & \$ 640,400
\end{array}$

$\text { Net Sales}$  $\quad $ $\quad $ $\quad $$\quad $$\quad $$ 786,200   
A)What is the cost ratio for Grand Department Store? (Round to the nearest whole percent)
B)What is the estimated value of the ending inventory at retail?

Accepted Answer

The answer of Grand Department Store
July 1 − July 31...

Question 4

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 5

Best Value Inc. had net sales of $1,313,930 for the year. If the beginning inventory at retail was $530,800 and the ending inventory at retail was $242,100, find the inventory turnover at retail. (Round your answer to the nearest tenth)

Accepted Answer

The answer of Best Value Inc. had net sales of...

Question 6

Malone's Products
August 1 − August 31 $$\begin{array} { l l l } 
& \text { Cost } & \text { Retail } \
\hline \text { Beginning Inventory, August 1 } & \$ 135,000 & \$ 180,000 \
\text { Purchases } & \$ 300,000 & \$ 400,000\
\text { Net Sales}\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\$ 450,000\
\end{array}$$ Using the retail method, Malone found the estimated value of his ending inventory at cost on August 31 was $97,500. What was the amount of his gross profit?

Accepted Answer

The answer of Malone's Products
August 1 − August 31 \[\begin{array}...

Question 7

Bigg Stores had net sales of $254,700 for July. They maintain a gross margin of 56% on sales, and estimate their ending inventory for July to be $78,400. What is the amount of goods available for sale?

Accepted Answer

The answer of Bigg Stores had net sales of $254,700...

Question 8

Inventory is defined as the goods that a company has in its possession at any given time. ​

Accepted Answer

Inventory refers to all the items, goods, merchandise, and materials that a company holds for the purpose of resale, repair, refurbishment, or use in production.

Question 9

The current inventory turnover at retail for Jennifer's Lingerie is 3.8, based on net sales of $3,270,490. The published inventory turnover at retail is 5.2. 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 10

An inventory system in which merchandise is physically counted at least once a year to determine the value of goods available for sale is known as a periodic inventory system.​

Accepted Answer

The answer of An inventory system in which merchandise is...

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

Swenson Glass had cost of goods sold for the year of $6,240,000. The beginning inventory at cost was $586,300 and the ending inventory at cost amounted to $492,900.

A)What was the average inventory for the year?
B)What was the actual inventory turnover rate at cost for the company? (Round your answer to the nearest tenth)

Accepted Answer

The answer of Swenson Glass had cost of goods sold...

Question 13

Grande Market had net sales of $339,900 for July. They maintain a gross margin of 48% on sales, and estimate their ending inventory for July to be $96,000. What is the amount of goods available for sale?

Accepted Answer

The answer of Grande Market had net sales of $339,900...

Question 14

An inventory valuation method that assumes the items purchased by a company last are the first items to be sold is called the perpetual valuation method.​

Accepted Answer

The description refers to the Last-In, First-Out (LIFO) inventory valuation method, not the perpetual valuation method. The perpetual method is about how inventory is tracked (continuously updating inventory levels), not the order in which inventory is assumed to be sold.

Question 15

​In the FIFO inventory method, it is assumed that the items purchased first are the first ones to be sold.

Accepted Answer

The FIFO (First-In, First-Out) inventory method assumes that the first items purchased or produced are the first ones to be sold, meaning the oldest inventory items are sold before newer inventory.

Question 16

Calculate the total number of units available for sale and the cost of goods available for sale from the following inventory: $$\begin{array} { l l l } 
\text { Date } & \text { Units } & \text { Cost per unit } \
\hline \text { Beginning inventory, Jan. 1 } & 700 & \$ 20 \
\text { Purchase, February 10 } & 1,300 & \$ 25 \
\text { Purchase, March } 18 & 1,400 & \$ 35 \
\text { Purchase, July 15 } & 1,900 & \$ 40 \
\text { Purchase, October } 9 & 1,200 & \$ 32
\end{array}$$ 
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 17

Goods purchased for resale are called merchandise inventory.​

Accepted Answer

Merchandise inventory refers to the goods a company buys for the purpose of selling them to customers at a profit.

Question 18

Jungle Jim's had sales of $205,400 in the month of October. Use the retail method to estimate the value of the inventory as of October 31 given the following financial information: $\begin{array}{llcc}
  \text {Jungle Jim's  } &  \
 \text { Financial Highlights } &\
 \text { October 1 -October 31 } &\
\end{array}$
$\begin{array}{lll} 
& \text { Cost } & \text { Retail } \
\text { Beginning Inventory } & \$ 137,211 & \$ 328,500 \
\text { Net Purchases (October) } & 138,849 & 313,500 \
\hline
\end{array}$

Accepted Answer

The answer of Jungle Jim's had sales of $205,400 in...

Question 19

The retail method of inventory estimation uses a comparison of goods available for sale at a cost and at retail.

Accepted Answer

The retail method of inventory estimation involves comparing the total cost of goods available for sale to their total retail price, in order to estimate the ending inventory at cost.

Question 20

Doc's Discount
November 1 − November 30 $\begin{array}{lll} 
&\quad  \quad  \quad  \quad   \text { Cost } & \text { Retail } \
\hline \text { Beginning Inventory, November } 1 &\quad  \quad  \quad   \$ 40,000 & \$ 64,000 \
\text { Purchases } &\quad  \quad  \quad   \$ 245,000 & \$ 392,000 \
\text { Net Sales } \quad  \quad  \quad  \quad  \quad  \quad  \quad  \quad  \quad  \quad  \quad  \$380,000
\end{array}$
 Using the retail method, estimate the value of the ending inventory at cost on November 30. (Round the cost ratio to the nearest tenth of a percent)

Accepted Answer

The answer of Doc's Discount
November 1 − November 30 \(\begin{array}{lll}...

Quiz 16: Inventory

The formula for the average cost method of inventory valuation is as follows: ? $\text { Average Cost Per Unit } = \frac { \text { cost of goods available for sale } } { \text { total units available for sale } }$ ?

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)

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.

Best Value Inc. had net sales of $1,313,930 for the year. If the beginning inventory at retail was $530,800 and the ending inventory at retail was $242,100, find the inventory turnover at retail. (Round your answer to the nearest tenth)

Bigg Stores had net sales of $254,700 for July. They maintain a gross margin of 56% on sales, and estimate their ending inventory for July to be $78,400. What is the amount of goods available for sale?

Inventory is defined as the goods that a company has in its possession at any given time.

The current inventory turnover at retail for Jennifer's Lingerie is 3.8, based on net sales of $3,270,490. The published inventory turnover at retail is 5.2. Since the actual turnover rate is less than the published rate, find the target average inventory at retail.

An inventory system in which merchandise is physically counted at least once a year to determine the value of goods available for sale is known as a periodic inventory system.

Grande Market had net sales of $339,900 for July. They maintain a gross margin of 48% on sales, and estimate their ending inventory for July to be $96,000. What is the amount of goods available for sale?

An inventory valuation method that assumes the items purchased by a company last are the first items to be sold is called the perpetual valuation method.

In the FIFO inventory method, it is assumed that the items purchased first are the first ones to be sold.

Goods purchased for resale are called merchandise inventory.

The retail method of inventory estimation uses a comparison of goods available for sale at a cost and at retail.

Quiz 16: Inventory

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)

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.

Best Value Inc. had net sales of $1,313,930 for the year. If the beginning inventory at retail was $530,800 and the ending inventory at retail was $242,100, find the inventory turnover at retail. (Round your answer to the nearest tenth)

Bigg Stores had net sales of $254,700 for July. They maintain a gross margin of 56% on sales, and estimate their ending inventory for July to be $78,400. What is the amount of goods available for sale?

Inventory is defined as the goods that a company has in its possession at any given time. ​

The current inventory turnover at retail for Jennifer's Lingerie is 3.8, based on net sales of $3,270,490. The published inventory turnover at retail is 5.2. Since the actual turnover rate is less than the published rate, find the target average inventory at retail.

An inventory system in which merchandise is physically counted at least once a year to determine the value of goods available for sale is known as a periodic inventory system.​

Grande Market had net sales of $339,900 for July. They maintain a gross margin of 48% on sales, and estimate their ending inventory for July to be $96,000. What is the amount of goods available for sale?

An inventory valuation method that assumes the items purchased by a company last are the first items to be sold is called the perpetual valuation method.​

​In the FIFO inventory method, it is assumed that the items purchased first are the first ones to be sold.

Goods purchased for resale are called merchandise inventory.​

The retail method of inventory estimation uses a comparison of goods available for sale at a cost and at retail.

Inventory is defined as the goods that a company has in its possession at any given time.

An inventory system in which merchandise is physically counted at least once a year to determine the value of goods available for sale is known as a periodic inventory system.

An inventory valuation method that assumes the items purchased by a company last are the first items to be sold is called the perpetual valuation method.

In the FIFO inventory method, it is assumed that the items purchased first are the first ones to be sold.

Goods purchased for resale are called merchandise inventory.