A local Chevrolet dealership carries the following types of vehicles: Unit Unit Inventory Items Vans Quantity Cost NRV Trucks 2-door sedans $27,000 18,000 $25,000 17,000 15,000 7 3 13,000 4-door sedans 20,000 17,000 37,000 30,000 Sports cars 1 40,000 SUVS 6 28,000 Because of recent increases in gasoline prices, the car dealership has noticed a reduced demand for its SUVS, vans, and trucks. 2. Determine whether each inventory item would be reported at cost or net realizable value (NRV). Enter the amount of either the Unit Cost or Unit NRV in the "Lower of Cost and NRV per unit" column and then multiply this amount by the quantity of each inventory item and enter it in the Total column. Lower of Cost Inventory Items Cost or NRV and NRV per Total unit Vans Trucks 2-door sedans 4-door sedans Cost Sports cars NRV SUVS Total

A local Chevrolet dealership carries the following types of vehicles: Unit Unit Inventory Items Vans Quantity Cost NRV Trucks 2-door sedans $27,000 18,000 $25,000 17,000 15,000 7 3 13,000 4-door sedans 20,000 17,000 37,000 30,000 Sports cars 1 40,000 SUVS 6 28,000 Because of recent increases in gasoline prices, the car dealership has noticed a reduced demand for its SUVS, vans, and trucks. 2. Determine whether each inventory item would be reported at cost or net realizable value (NRV). Enter the amount of either the Unit Cost or Unit NRV in the "Lower of Cost and NRV per unit" column and then multiply this amount by the quantity of each inventory item and enter it in the Total column. Lower of Cost Inventory Items Cost or NRV and NRV per Total unit Vans Trucks 2-door sedans 4-door sedans Cost Sports cars NRV SUVS Total

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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4) One of the managers of the business has indicated that his main objective is to cut back on his tax liability as much as possible and is of the view that the FIFO method would be best. Do you agree with him? Explain your answer clearly, with reference to the most popular methods of inventory valuation. 5) Universal Enterprise sells a product that cost $450 per unit and has a monthly demand of 5,000 units. The annual holding cost per unit is calculated as 5% of the unit purchase price. It costs the business $75 to place a single order. Currently the business places 12 orders each year. i) What is the total stock administrative cost of Universal’s current inventory policy? ii) Is this the entity’s cost minimizing solution for this product each year? Explain.
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A successful franchise owner of a prestigious sporting goods chain is feeling the effects of technology, with more and more online sales and less and less customers in the shops. Locally there are three stores, and typically each store needs the following positions staffed for optimum profitability and success: a store manager an assistant manager five department managers and 20 customer service representatives, Averaging $1 200 000 in annual revenue. However, there has been a trend of 20 percent sales decline in stores, with an increase of 30 percent sales online (last year the online revenue stream was $300 000). The franchise owner was able to handle all of the online sales with a team of five full-time remote workers (working from home) last year. The owner wants each store to maintain its productivity, which he measures as the revenue per employee. He also thinks that there is potential to grow the online business. Please help the owner by answering the following questions.…
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Vishnu
I am working on a problem that involves using FIFO, LIFO and average cost. I tried practicing the FIFO method and still get it wrong. the problem states: the following information pertains to Mason company for 2018: beginning inventory 120 units $40 units purchased 330 units $44 ending inventory consisted of 70 units. Mason sold 380 units at $88 each. All purchases and sales were made with cash. operating expenses amounted to $3100.