Describe the costs that would be affected by implementing a just in time system.

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Answer 1

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Chapter 2, Problem 2MC

1.

To determine

Describe the costs that would be affected by implementing a just in time system.

2.

To determine

Describe whether the customer of P Company would reap benefits from the change to the just in time system.

3.

To determine

Describe whether Mr. V will have to make any changes in accounting inventory under just in time system.

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Recently, Abercrombie & Fitch has been implementing a turnaround strategy since its sales had been falling for the past few years (11% decrease in 2014, 8% in 2015, and just 3% in 2016.) One part of Abercrombie's new strategy has been to abandon its logo-adorned merchandise, replacing it with a subtler look. Abercrombie wrote down $20.6 million of inventory, including logo-adorned merchandise, during the year ending January 30, 2016. Some of this inventory dated back to late 2013. The write-down was net of the amount it would be able to recover selling the inventory at a discount. The write-down is significant; Abercrombie's reported net income after this write-down was $35.6 million. Interestingly, Abercrombie excluded the inventory write-down from its non-GAAP income measures presented to investors; GAAP earnings were also included in the same report. Question: What impact would the write-down of inventory have had on Abercrombie's expenses, Gross margin, and Net income?

Recently, Abercrombie & Fitch has been implementing a turnaround strategy since its sales had been falling for the past few years (11% decrease in 2014, 8% in 2015, and just 3% in 2016.) One part of Abercrombie's new strategy has been to abandon its logo-adorned merchandise, replacing it with a subtler look. Abercrombie wrote down $20.6 million of inventory, including logo-adorned merchandise, during the year ending January 30, 2016. Some of this inventory dated back to late 2013. The write-down was net of the amount it would be able to recover selling the inventory at a discount. The write-down is significant; Abercrombie's reported net income after this write-down was $35.6 million. Interestingly, Abercrombie excluded the inventory write-down from its non-GAAP income measures presented to investors; GAAP earnings were also included in the same report. Question: What impact would the write-down of inventory have had on Abercrombie's assets, Liabilities, and Equity?

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Answer 2

Question

Chapter 2, Problem 2MC

1.

To determine

Describe the costs that would be affected by implementing a just in time system.

2.

To determine

Describe whether the customer of P Company would reap benefits from the change to the just in time system.

3.

To determine

Describe whether Mr. V will have to make any changes in accounting inventory under just in time system.

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Answer 3

Question

Chapter 2, Problem 2MC

1.

To determine

Describe the costs that would be affected by implementing a just in time system.

2.

To determine

Describe whether the customer of P Company would reap benefits from the change to the just in time system.

3.

To determine

Describe whether Mr. V will have to make any changes in accounting inventory under just in time system.

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Answer 4

Question

Chapter 2, Problem 2MC

1.

To determine

Describe the costs that would be affected by implementing a just in time system.

2.

To determine

Describe whether the customer of P Company would reap benefits from the change to the just in time system.

3.

To determine

Describe whether Mr. V will have to make any changes in accounting inventory under just in time system.

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Answer 5

Chapter 2, Problem 2MC

1.

To determine

Describe the costs that would be affected by implementing a just in time system.

2.

To determine

Describe whether the customer of P Company would reap benefits from the change to the just in time system.

3.

To determine

Describe whether Mr. V will have to make any changes in accounting inventory under just in time system.

Answer 6

Chapter 2, Problem 2MC

1.

To determine

Describe the costs that would be affected by implementing a just in time system.

Answer 7

Chapter 2, Problem 2MC

1.

To determine

Describe the costs that would be affected by implementing a just in time system.

Answer 8

2.

To determine

Describe whether the customer of P Company would reap benefits from the change to the just in time system.

Answer 9

2.

To determine

Describe whether the customer of P Company would reap benefits from the change to the just in time system.

Answer 10

3.

To determine

Describe whether Mr. V will have to make any changes in accounting inventory under just in time system.

Answer 11

3.

To determine

Describe whether Mr. V will have to make any changes in accounting inventory under just in time system.

Answer 12

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Answer 13

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Answer 14

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Answer 15

Ch. 2 - What are the two major objectives of materials...Ch. 2 - Prob. 2Q Ch. 2 - What factors should management consider when...Ch. 2 - Prob. 4Q Ch. 2 - What kind of information and data are needed to...Ch. 2 - How would you define the term economic order...Ch. 2 - What kind of information and data are needed to...Ch. 2 - What factors should be considered when determining...Ch. 2 - Prob. 9Q Ch. 2 - Prob. 10Q

Describe the costs that would be affected by implementing a just in time system.

Describe the costs that would be affected by implementing a just in time system.

Describe whether the customer of P Company would reap benefits from the change to the just in time system.

Describe whether Mr. V will have to make any changes in accounting inventory under just in time system.

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Chapter 2 Solutions