The inventory policy is to have ending inventory equal to 20% of next month's sales.. April Desired ending inventory Beginning inventory Budgeted sales 378 O 342 O 360 ? 386 300 Budgeted production Compute budgeted production in May. May O not enough information 90 ? 360 ?
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- Weighted Average Cost Method with Perpetual InventoryThe beginning inventory for Midnight Supplies and data on purchases and sales for a three-month period are as follows:DateTransactionNumberof UnitsPer UnitTotalJan. 1Inventory7,500$75.00$562,50010Purchase22,50085.001,912,50028Sale11,250150.001,687,50030Sale3,750150.00562,500Feb. 5Sale1,500150.00225,00010Purchase54,00087.504,725,00016Sale27,000160.004,320,00028Sale25,500160.004,080,000Mar. 5Purchase45,00089.504,027,50014Sale30,000160.004,800,00025Purchase7,50090.00675,00030Sale26,250160.004,200,000Required:1. Record the inventory, purchases, and cost of goods sold data in a perpetual inventory record similar to the one illustrated in Exhibit 5, using the weighted average cost method. Round unit cost to two decimal places, if necessary. Round all total cost amounts to the nearest dollar.Midnight SuppliesSchedule of Cost of Goods SoldWeighted Average Cost MethodFor the Three Months Ended March 31 PurchasesCost of Goods…Phillips Supply uses a periodic inventory system but needs to determine the approximate amountof inventory at the end of each month without taking a physical inventory. Phillips has provided thefollowing inventory data: EXERCISE 8.10Estimating Inventoryby the Retail MethodEEbLO6 RetailCost SellingPrice PriceInventory of merchandise, June 30. . . . . . . . . . . . . . . . . . . . . . . . . . . . $300,000 $500,000Purchases during July . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 222,000 400,000Goods available for sale during July. . . . . . . . . . . . . . . . . . . . . . . . . . . $522,000 $900,000Net sales during July . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $600,000a. Estimate the cost of goods sold and the cost of the July 31 ending inventory using the retailmethod of evaluation.b. Was the cost of Phillips’s inventory, as a percentage of retail selling prices, higher or lower inJuly than it was in June? Explain.Calculate Inventory Carrying Cost (ICC) using the information below. annual demand ordering cost per order inventory carrying cost percentage leadtime unit value #days in the period. EOQ 1000 $75 20% 3 days $30 360 158
- Given the following information, formulate an inventory management system. The item is demanded 50 weeks a year. Item cost Order cost Annual holding cost (N) Annual demand Average demand $ 11.00 $257.00 33 26,600 532 Standard deviation of weekly denand Lead time Service probability 30 units /order % of item cost units /week 2 week 98% a. Determine the order quantity and reorder point. (Use Excel's NORMSINV( ) function to find your z-value and then round that z- value to 2 decimal places. Do not round any other intermediate calculations. Round your final answers to the nearest whole number.) Optimal order quantity units units Reorder point b. Determine the annual holding and order costs. (Do not round any intermediate calculations. Round your final answers to 2 decimal places.) Holding cost Ordering cost C. Assume a price break of $60 per order was offered for purchase quantities of 2,000 units per order. If you took advantage of this price break, how much would you save annually? (Do…EA5. EA5. LO 10.2Akira Company had the following transactions for the month.Chart showing Beginning Inventory of 150 units at $10 per unit, Purchase of March 31 of 160 units at $12 each, Purchase of October 15 of 130 units at $15 each, and ending inventory of 50 units at a cost of ? each.Calculate the ending inventory dollar value for the period for each of the following cost allocation methods, using periodic inventory updating. Provide your calculations. first-in, first-out (FIFO)last-in, first-out (LIFO)weighted average (AVG)Bullwinkle company has the following inventory, purchases, and sales data for the month of August. Beginning Inventory: Aug 1 20 units @ $2 $40 Purchases: Aug 10 60 units @ $2.5 150 Aug 20 70 units @ $3 210 Sales: Aug 12 30 units Aug 27 60 units Instructions: Determine the COGS and ending inventory cost at August using the assumptions (a) FIFOand (b) average-cost
- Blossom, Inc. estimates the cost of its physical inventory at March 31 for use in an interim financial statement. The rate of markup on cost is 25%. The following account balances are available: Inventory, March 1 $548000 Purchases 428000 Purchase returns 18000 Sales during March 744000 The estimate of the cost of inventory at March 31 would be $232000. $380800. $362800. $214000.10:34 PM O M O ul? 42 .. (PLEASE CONTINUE TO THE NEXT PAGE) TABLE 3 Ratio Industry Average Actual 2019 Actual 2020 Current Ratio 1.33 2.45 Quick (acid-Test) ratio 0.84 1.01 1.70 Inventory Turnover 13.67 12.74 Average Age of Inventory 26.69 28.66 Average Collection Period 45.90 35.57 Total Assets Turnuver 49% 56% Price Earnings (P/E) Ratio 28.94 29.20 18.04 Times Interest Eamed Ratio 30.32 60.05 Debt Ratio 1.0905 18.89% 17.21% Gross Profit 39.98% 39.17% 40.19% Margin Operating Profit Margin 8.10% 11.89% Net Profit Margin 7.60 5.48% 8.19% Earnings Per Share 1.21 2.25 Return on Total Assets 2.71% 4.57% Return on Common Equity 24.80 3.31% 5.52% N.B. Healthy Foods Manufacturing Share Price as at 30" December 2019, $35.25 Healthy Fuods Manufacturing Share Price as at 30" December 2020, $40.50 a) Using time series analysis and industry averages assess Healthy Foods Manufacturing Company Limited financial condition over the years 2019 and 2020 as it relates to the categories listeel beluw. i.…Management of Inventory 9.22 (1) What is the total annual cost of the existing inventory policy? (ii) How much money would be saved by employing the economic order quantity (EOQ) ? [Ans. (1) 65,063 (including cost of boxes); (ii) 62.50 or say 63] 8. Ace Ltd. Manufactures a product and the following particulars are collected for the year ended March, 2011: 1000 Units Monthly demand *100 $ Cost of placing an order 15 per unit Annual carring cost 50 units per weak Normal usage 25 units per week Minimum usage Maximum usage 75 units per week 4-6 weeks Re-order period You are required to calculate : (i) Re-order quantity ) Re-order level (iii) Minimum level (iv) Maximum level (v) Average stock level. [Ans. (i) 186 units, (ii) 450 units; (iii) 200 units; (iv) 536 units; (v) 368 units, or 293 units]
- WHAT IS THE WEIGHTED-AVERAGE COST PER UNIT BASE OFF THE CHART?? You are provided with the following information for Concord Inc. for the month ended June 30, 2020. Concord uses the periodic method for inventory. Date Description Quantity Unit Cost orSelling Price June 1 BEGINNING INVENTORY 39 41 June 4 PURCHASE 139 46 June 10 SALE 111 68 June 11 SALE RETURN 14 68 June 18 PURCHASE 53 47 June 18 PURCHASE RETURN 9 47 June 25 SALE 68 73 June 28 PURCHASE 32 51Beginning Inventory at FIFO: 15 Units @ $16 = $240 Beginning Inventory at LIFO: 15 Units @ $12 = $1801. Compute the inventory turnover ratio for the month of January under the FIFO and LIFO inventory costing methods. 2. Which costing method is the more accurate indicator of the efficiency of inventory management?Questions: Develop a material requirement plan for item D, D and E What is the largest quantity of projected on hand inventory for any one of the weeks for item D? How many planned order releases are there for item C? What is the planned receipt in week 3 for item E?
