LITE TUTTOming inuman upplies in the questions display cu cium.O'Brien Company manufactures and sells one product. The following information pertains to each of thecompany's first three years of operations:Variable costs per unit:Manufacturing:Direct materialsDirect laborVariable manufacturing overheadVariable selling andadministrativeFixed costs per year:Fixed manufacturing overheadFixed selling and administrativeexpenses$570,000$110,000During its first year of operations, O'Brien produced 100,000 units and sold 74,000 units. During its secondyear of operations, it produced 76,000 units and sold 97,000 units. In its third year, O'Brien produced 81,000units and sold 76,000 units. The selling price of the company's product is $77 per unit.Case 4-29 Part-2 (Algo)2. Assume the company uses variable costing and a LIFO inventory flow assumption (LIFO means last-in first-out. Inother words, it assumes that the newest units in inventory are sold first):a. Compute the unit product cost for Year 1, Year 2, and Year 3.b. Prepare an income statement for Year 1, Year 2, and Year 3.Complete this question by entering your answers in the tabs below.Req 2A Req 2BPrepare an income statement for Year 1, Year 2, and Year 3.O'Brien CompanyVariable Costing Income StatementYear 1Year 2SalesVariable expenses:Variable cost of goods soldTotal variable expensesFixed expenses:$ 27$ 14$ 4$2Total fixed expenses$< Req 2A0000 $00Year 300 $Req 2B >0000

Variable Costing When determining the cost of a unit of a product, the variable costing approach…

2. Assume the company uses variable costing and a LIFO inventory flow assumption (LIFO means last-in first-out. In other words, it assumes that the newest units in inventory are sold first): a. Compute the unit product cost for Year 1, Year 2, and Year 3. b. Prepare an income statement for Year 1, Year 2, and Year 3. Complete this question by entering your answers in the tabs below. Req 2A Req 2B

2. Assume the company uses variable costing and a LIFO inventory flow assumption (LIFO means last-in first-out. In other words, it assumes that the newest units in inventory are sold first): a. Compute the unit product cost for Year 1, Year 2, and Year 3. b. Prepare an income statement for Year 1, Year 2, and Year 3. Complete this question by entering your answers in the tabs below. Req 2A Req 2B

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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17. Models of inventory systems frequently consider the relationships among a beginning inventory, a production quantity, a demand or sales, and an ending inventory. For a given production period j, let * 2, d, beginning inventory for period j (ending inventory from period j-1 production quantity in period j demand in period j ending inventory for period j a. Write the mathematical relationship or model that shows ending inventory as a function of beginning inventory, production, and demand. b. What constraint should be added if production capacity for period j is given by C, ? e. What constraint should be added if inventory requirements for period j mandate an ending inventory of at least 1;?
erms and phrases relating to concepts discussed in this chapter along with descriptions of those terms and phrases follow. Match each term, 1 through 15, with the best description a through o. Key Inventory Terms and Phrases Key Inventory Terms and Phrases Description of Terms and Phrases Answerabcdefghijklmno 1. Net realizable value a. Requires retroactive restatement of financial statements Answerabcdefghijklmno 2. Lower-of-cost-or-market b. Method for valuing inventory applying to LIFO and retail methods Answerabcdefghijklmno 3. Allowance to reduce inventory to net realizable value c. Cancellation of additional markup Answerabcdefghijklmno 4. Gross profit method d. Inventory estimation that is not acceptable under GAAP Answerabcdefghijklmno 5. Estimated loss on purchase commitment e. Method that approximates lower-of-cost-or-market Answerabcdefghijklmno 6. Change in inventory method from average to FIFO f. Not usually practical to retroactively restate or adjust…
Perpetual inventory using LIFO The following units of a particular item were available for sale during the calendar year: Jan. 1 Inventory 3,900 units at $41 Apr. 19 Sale 2,600 units June 30 Purchase 4,900 units at $46 Sept. 2 Sale 5,600 units Nov. 15 Purchase 2,000 units at $48 This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the question below. Open spreadsheet The firm maintains a perpetual inventory system. Determine the cost of goods sold for each sale and the inventory balance after each sale, assuming the last-in, first-out method. Present the data in the form illustrated in Exhibit 4. Under LIFO, if units are in inventory at two or more different costs, enter the units with the LOWER unit cost first in the Inventory Unit Cost column. Round your answers for quantity values to the nearest whole number, for unit cost values to the nearest cent, and for total cost values to the…
Lower-of-Cost-or-Market InventoryOn the basis of the following data, determine the value of the inventory at the lower of cost or market. Assemble the data in the form illustrated in Exhibit 9. ProductInventoryQuantityUnitCost PriceUnitMarket Value per Unit(Net Realizable Value)Model A300$140$125Model B50090112Model C1506059Model D800120115Model E400140145 Inventory at the Lower of Cost or MarketProductTotal CostTotal MarketLower of Total Cost or Total MarketA$$$B C D E Total$$$
Calculate a) cost of goods sold, b) ending inventory, and c) gross margin for A76 Company, considering the following transactions under three different cost allocation methods and using perpetual inventory updating. Provide calculations for last-in, first-out (LIFO). Beginning inventory Sold Purchased Sold Purchased Sold Ending inventory Beginning Sale Purchase Sale Purchase Sale Number of Units Unit Cost Sales 260 160 520 400 410 370 260 Number of Units 520 $130 400 133 140 Cost of Goods Purchased Unit Cost $170 Total Purchases 172 204 133 140 Total Cost 69,160 56,000 LIFO (perpetual) Inventory Cost of Goods Sold Number of Units 160 400 370 Unit Cost Total COGS $ 130 133 Total Cost Number of Units Cost of Inventory Remaining Unit Cost Total Cost 100000
Refer to the data in attached image. 1.Using the perpetual inventory system, compute the cost of ending inventory, cost of goods sold, and gross margin. Use the average-cost, FIFO, and LIFO inventory costing methods. (Round unit costs to the nearest cent.) 2.Explain the reasons for the differences in gross mar-gin produced by the three methods.
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Take me to the text a) Fill in the missing numbers in the inventory schedule using the weighted-average cost inventory valuation method. This company uses the perpetual inventory system. Do not enter dollar signs or commas in the input boxes.Round all answers to 2 decimal places. When calculating the unit cost, round to 2 decimal places as well. Inventory Schedule Purchases Sales Balance Transaction Description Quantity Amount Quantity Amount Quantity Amount Opening Balance 0 $ 0 #1 Purchase from AAA Co. 600 $6,600.00 Answer $Answer Answer $Answer #2 Sale to SSS Co. Answer $Answer Answer $Answer 300 $3,300.00 #3 Sale to TTT Co. Answer $Answer 150 $Answer Answer $Answer #4 Purchase from BBB Co. 70 $1,400.00 Answer $Answer Answer $Answer #5 Sale to UUU Co. Answer $Answer 30 $Answer Answer $Answer b) If the FIFO method had been used, what would the value of COGS been for the sale to UUU Co.? COGS = $Answer c) If the specific identification method had…
The following information is taken from a company’s records. Applying the lower-of-cost-or-market approach, what is the correct value that should be reported on the balance sheet for the inventory? Cost per Unit Market Value per Unit Inventory item 1 (10 units) $ 36 $ 35 Inventory item 2 (25 units) $ 20 $ 20 Inventory item 3 (12 units) $ 6 $ 8 Pick the lower of the two and multiple by the number of units.
Required information Use the following information for the Exercises below. [The following information applies to the questions displayed below.] Laker Company reported the following January purchases and sales data for its only product. Activities Units Acquired at Cost 215 units @ $14.00 = $3,010 Date Units sold at Retail Jan. 1 Beginning inventory Jan. 10 Sales 165 units @ $23.00 Jan. 20 Purchase 160 units @ $13.00 = 2,080 Jan. 25 Sales 190 units @ $23.00 Jan. 30 Purchase 330 units @ $12.50 = 4,125 Totals 705 units $9,215 355 units The Company uses a perpetual inventory system. For specific identification, ending inventory consists of 350 units, where 330 are from the January 30 purchase, 5 are from the January 20 purchase, and 15 are from beginning inventory. Exercise 5-3 Perpetual: Inventory costing methods LO P1 Required: 1. Complete the table to determine the cost assigned to ending inventory and cost of goods sold using specific identification. 2. Determine the cost assigned to…
1a The inventory cost flow method that reports the earliest costs in ending inventory is a. LIFO b. weighted average cost c. FIFO d. specific identification
a.) determine the cost assigned to ending inventory and to the cost of goods sold using FIFO. b.) determine the cost assigned to ending inventory and to cost of good solc using LIFO. c.) compute the gross margin for each method