
Identify the method followed by manufacturing firms to minimize inventories

Answer to Problem 1SSQ
b. Just-in-time
Explanation of Solution
Justification for incorrect option:
a. The quick response method is used by the manufacturers and retailers to communicate the inventory need to the supplier. Thus, this method does not minimize the inventory level. Hence, it is an incorrect option.
c. Just-in-case is an inventory management system under which the manufactures keeps buffers of inventory for unforeseen situation. This method increases the stock of inventory. Hence, it is an incorrect option.
d. Specific identification method identifies the cost of each item in ending inventory by separating purchases. This method is used to record the flow of inventory. Hence, it is an incorrect option.
Justification for correct option:
b. Just-in-time is a system of managing inventory by reducing the storing and moving inventory costs. It involves raw material purchase planning and careful management to stimulate a faster delivery of goods and attains customer satisfaction. Under this method inventory is ordered at the point of requirement. Hence, it is a correct option.
Therefore, the correct answer is option b.
Want to see more full solutions like this?
Chapter 6 Solutions
Financial Accounting for Undergraduates
- Hello tutor solve this question and general accounting questionarrow_forwardEagles Manufacturing uses the declining balance method of depreciation. They purchased a machine for $160,000 with an estimated salvage value of $20,000 and a useful life of 5 years. Using a declining balance rate of 30%, calculate the depreciation expense for the second year of the machine's use.arrow_forwardCan you explain the correct methodology to solve this general accounting problem?arrow_forward
- Please help me solve this general accounting question using the right accounting principles.arrow_forwardI want to this question answer for General accounting question not need ai solutionarrow_forwardVincent Company's cost of goods sold is $640,000 variable and $510,000 fixed. The company's selling and administrative expenses are $420,000 variable and $630,000 fixed. If the company's sales is $2,350,000, what is its net income/loss?arrow_forward
- Dakota Manufacturing uses a standard cost system in which manufacturing overhead is applied to units of product on the basis of standard machine hours. During April, the company used a denominator activity of 40,000 machine hours in computing its predetermined overhead rate. However, 52,000 standard machine hours were allowed for the month's actual production. If the fixed manufacturing overhead volume variance for April was $9,000 unfavorable, then the total budgeted fixed manufacturing overhead cost for the month was $_.arrow_forwardWhitney manufacturing produces die-cast metal tsve cars for toy shops.arrow_forwardBentley Industries applies manufacturing overhead on the basis of direct labor hours. At the beginning of the most recent year, the company based its predetermined overhead rate on a total estimated overhead of $127,500 and 5,100 estimated direct labor hours. Actual manufacturing overhead for the year amounted to $131,200 and actual direct labor hours were 4,800. The applied manufacturing overhead for the year was closest to __. Helparrow_forward
- AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
- Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSONIntermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill EducationFinancial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education





