ConvertInsertMANAGEMENT SCIENCEASSESSMENT TASKSPROBLEM 1.For each of the following costs, indicate whether the cost would be an out-of-pocket carrying cost (C), or a cost ofplacing an order (P). If the item does not qualify for either of these categories, note that it as none of the above (N)Assume that wages vary with the level of work while salaries are fixed for a monthly or longer time period.1. Hourly fee for inventory audit.2 Salary of purchasing supervisor.3. Costs to audit purchase orders and invoices, on a per-order basis.4. Taxes on inventory.5. Stockout costs.6. Storage costs charged per unit in inventory.7. Fire insurance on inventory.8. Fire insurance on warehouse.9. Obsolescence costs on inventory. |10. Shipping costs per shipment.PROBLEM 2The Strawberry Bread Company buys and then sells (as bread) 2.6 million bushels of wheat annually. The wheat mustbe purchased in multiples of 2,000 bushels. Ordering costs, which include grain elevator removal charges of P3,500,are P5,000 per order. Annual carrying costs are 2 percent of the purchase price of PS per bushel. The companymaintains a safety stock of 200,000 bushels. The delivery time is 6 weeks.REQUIRED:

Carrying costs includes all those expenses which incurred on holding and storing the unsold goods.

PROBLEM 1. For each of the following costs, indicate whether the cost would be an out-of-pocket carrying cost (C), or a cost of placing an order (P). If the item does not qualify for either of these categories, note that it as none of the above (N) Assume that wages vary with the level of work while salaries are fixed for a monthly or longer time period. 1. Hourly fee for inventory audit. 2. Salary of purchasing supervisor. 3. Costs to audit purchase orders and invoices, on a per-order basis. 4. Taxes on inventory. 5. Stockout costs. 6. Storage costs charged per umit in inventory. 7. Fire insurance on inventory. 8. Fire insurance on warehouse. 9. Obsolescence costs on inventory. | 10. Shipping costs per shipment. PROBLEM 2 The Strawberry Bread Company buys and then sells (as bread) 2.6 million bushels ofwheat annually. The wheat must be purchased in multiples of 2,000 bushels. Ordering costs, which include grain elevator removal charges of P3,500, are P5,000 per order. Annual carying costs are 2 percent of the purchase price of P5 per bushel. The company maintains a safety stock of 200,000 bushels. The delivery time is 6 weeks. REQUIRED:

PROBLEM 1. For each of the following costs, indicate whether the cost would be an out-of-pocket carrying cost (C), or a cost of placing an order (P). If the item does not qualify for either of these categories, note that it as none of the above (N) Assume that wages vary with the level of work while salaries are fixed for a monthly or longer time period. 1. Hourly fee for inventory audit. 2. Salary of purchasing supervisor. 3. Costs to audit purchase orders and invoices, on a per-order basis. 4. Taxes on inventory. 5. Stockout costs. 6. Storage costs charged per umit in inventory. 7. Fire insurance on inventory. 8. Fire insurance on warehouse. 9. Obsolescence costs on inventory. | 10. Shipping costs per shipment. PROBLEM 2 The Strawberry Bread Company buys and then sells (as bread) 2.6 million bushels ofwheat annually. The wheat must be purchased in multiples of 2,000 bushels. Ordering costs, which include grain elevator removal charges of P3,500, are P5,000 per order. Annual carying costs are 2 percent of the purchase price of P5 per bushel. The company maintains a safety stock of 200,000 bushels. The delivery time is 6 weeks. REQUIRED:

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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3. it is a product costing system generally used in just-in-time inventory environment. This costing system delays the costing process until the production of goods is completed by eliminating the detailed tracking of cost throughout the production system and preparing journal entries only at trigger points. a.Backflush costing B.Standard costing C.Normal costing D.Traditional costing E.None of the above
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Which of the following best defines " stockout costs"? A) They are physical goods used in operations. B) They are costs associated with retrieving inventory items from a workshop C) They are costs associated with interruptions to assembly lines D) They are associated with inventory being unavailable when needed to meet demand. E) None of the above.
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