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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The unadjusted cost of goods sold is calculated using which of the following equations? Multiple Choice O Beginning finished goods inventory + Cost of goods manufactured + Ending finished goods inventory Beginning finished goods inventory + Cost of goods manufactured - Ending finished goods inventory Beginning finished goods inventory - Cost of goods manufactured - Ending finished goods inventory Beginning finished goods inventory - Cost of goods manufactured + Ending finished goods inventory
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
The company would make an adjusting entry for the underapplied overhead by debiting cost of goods sold and- crediting hp
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.
The amount of raw material purchased in a period may be different than the amount of material used that period because finished goods inventory may fluctuate during the period. the number of units sold may be different from the number of units produced. the raw material inventory may increase/decrease during the period. companies often pay for material in the period after it is purchased.
5. The company's manager earns a bonus based on a percent of gross profit. Which method of inventory costing produces the highest bonus for the manager? O LIFO O Weighted Average O Specific Identification O FIFO
When overhead is overapplied, is the balance of Cost of Goods Sold, before adjustment, too low ortoo high? Why?
Which of the following costs will not affect cost of goods sold? Multiple Choice Inventory inspection costs. Inventory preparation costs. Inventory-related selling costs. O Freight charges incurred to bring inventory to the warehouse.
Assume that the underapplied or overapplied overhead is closed to Cost of Goods Sold. Prepare thenecessary journal entry.
10.Raw materials inventory shows the cost of completed goods available for sale to customers. True False