Inventory includes raw materials, work-in-process goods and finished products which are held with the purpose of sale. Given: CM is an inventory control specialist. Although he understands the more sophisticated computer inventory system, he is not well versed with the determination of inventory cost. (a) To explain: Should S Enterprises include in its inventory, normal brand-name goods purchased from its suppliers but not yet received if the terms of purchase are f.o.b. shipping point (manufacturer’s plant)? Why?

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Answer 1

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Chapter 8, Problem 2CA

To determine

Introduction: Inventory includes raw materials, work-in-process goods and finished products which are held with the purpose of sale.

Given: CM is an inventory control specialist. Although he understands the more sophisticated computer inventory system, he is not well versed with the determination of inventory cost.

(a)

To explain: Should S Enterprises include in its inventory, normal brand-name goods purchased from its suppliers but not yet received if the terms of purchase are f.o.b. shipping point (manufacturer’s plant)? Why?

To determine

(b)

To explain: Should S Enterprises include freight-in expenditures as an inventory cost? Why?

To determine

(c)

To explain: If S Enterprises purchases its goods on terms 2/10, net 30, should the purchases be recorded gross or net? Why?

To determine

(d)

To explain: Consignment and reporting for consignment.

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Bon Jovi Sports Ltd. manufactures athletic gear. One of its products is a cycling helmet that requires specialized plastic. During the quarter ending September 30, the company manufactured 4,500 helmets, using 2,500 kilograms of plastic. The plastic cost the company $16,250. According to the standard cost card, each helmet should require 0.55 kilograms of plastic at a cost of $6.80 per kilogram. Required: 1. What is the standard quantity of kilograms of plastic (SQ) that is allowed to make 4,500 helmets? 2. What is the standard materials cost allowed (SQ × SP) to make 4,500 helmets? 3. What is the material's spending variance? 4. What is the material's price variance and the material's quantity variance?

Langford Corporation provided the following financial data: • Net Income = $27,600 Assets at the Beginning of the Year = $198,000 = Assets at the End of the Year = $242,000 Find the return on assets (ROA) in percentage.

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Answer 2

Question

Chapter 8, Problem 2CA

To determine

Introduction: Inventory includes raw materials, work-in-process goods and finished products which are held with the purpose of sale.

Given: CM is an inventory control specialist. Although he understands the more sophisticated computer inventory system, he is not well versed with the determination of inventory cost.

(a)

To explain: Should S Enterprises include in its inventory, normal brand-name goods purchased from its suppliers but not yet received if the terms of purchase are f.o.b. shipping point (manufacturer’s plant)? Why?

To determine

(b)

To explain: Should S Enterprises include freight-in expenditures as an inventory cost? Why?

To determine

(c)

To explain: If S Enterprises purchases its goods on terms 2/10, net 30, should the purchases be recorded gross or net? Why?

To determine

(d)

To explain: Consignment and reporting for consignment.

Expert Solution & Answer

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Answer 3

Question

Chapter 8, Problem 2CA

To determine

Introduction: Inventory includes raw materials, work-in-process goods and finished products which are held with the purpose of sale.

Given: CM is an inventory control specialist. Although he understands the more sophisticated computer inventory system, he is not well versed with the determination of inventory cost.

(a)

To explain: Should S Enterprises include in its inventory, normal brand-name goods purchased from its suppliers but not yet received if the terms of purchase are f.o.b. shipping point (manufacturer’s plant)? Why?

To determine

(b)

To explain: Should S Enterprises include freight-in expenditures as an inventory cost? Why?

To determine

(c)

To explain: If S Enterprises purchases its goods on terms 2/10, net 30, should the purchases be recorded gross or net? Why?

To determine

(d)

To explain: Consignment and reporting for consignment.

Expert Solution & Answer

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Answer 4

Question

Chapter 8, Problem 2CA

To determine

Introduction: Inventory includes raw materials, work-in-process goods and finished products which are held with the purpose of sale.

Given: CM is an inventory control specialist. Although he understands the more sophisticated computer inventory system, he is not well versed with the determination of inventory cost.

(a)

To explain: Should S Enterprises include in its inventory, normal brand-name goods purchased from its suppliers but not yet received if the terms of purchase are f.o.b. shipping point (manufacturer’s plant)? Why?

To determine

(b)

To explain: Should S Enterprises include freight-in expenditures as an inventory cost? Why?

To determine

(c)

To explain: If S Enterprises purchases its goods on terms 2/10, net 30, should the purchases be recorded gross or net? Why?

To determine

(d)

To explain: Consignment and reporting for consignment.

Expert Solution & Answer

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Answer 5

Chapter 8, Problem 2CA

To determine

Introduction: Inventory includes raw materials, work-in-process goods and finished products which are held with the purpose of sale.

Given: CM is an inventory control specialist. Although he understands the more sophisticated computer inventory system, he is not well versed with the determination of inventory cost.

(a)

To explain: Should S Enterprises include in its inventory, normal brand-name goods purchased from its suppliers but not yet received if the terms of purchase are f.o.b. shipping point (manufacturer’s plant)? Why?

To determine

(b)

To explain: Should S Enterprises include freight-in expenditures as an inventory cost? Why?

To determine

(c)

To explain: If S Enterprises purchases its goods on terms 2/10, net 30, should the purchases be recorded gross or net? Why?

To determine

(d)

To explain: Consignment and reporting for consignment.

Answer 6

Chapter 8, Problem 2CA

To determine

Introduction: Inventory includes raw materials, work-in-process goods and finished products which are held with the purpose of sale.

Given: CM is an inventory control specialist. Although he understands the more sophisticated computer inventory system, he is not well versed with the determination of inventory cost.

(a)

To explain: Should S Enterprises include in its inventory, normal brand-name goods purchased from its suppliers but not yet received if the terms of purchase are f.o.b. shipping point (manufacturer’s plant)? Why?

Answer 7

Chapter 8, Problem 2CA

To determine

Introduction: Inventory includes raw materials, work-in-process goods and finished products which are held with the purpose of sale.

Given: CM is an inventory control specialist. Although he understands the more sophisticated computer inventory system, he is not well versed with the determination of inventory cost.

(a)

To explain: Should S Enterprises include in its inventory, normal brand-name goods purchased from its suppliers but not yet received if the terms of purchase are f.o.b. shipping point (manufacturer’s plant)? Why?

Answer 8

To determine

(b)

To explain: Should S Enterprises include freight-in expenditures as an inventory cost? Why?

Answer 9

To determine

(b)

To explain: Should S Enterprises include freight-in expenditures as an inventory cost? Why?

Answer 10

To determine

(c)

To explain: If S Enterprises purchases its goods on terms 2/10, net 30, should the purchases be recorded gross or net? Why?

Answer 11

To determine

(c)

To explain: If S Enterprises purchases its goods on terms 2/10, net 30, should the purchases be recorded gross or net? Why?

Answer 12

To determine

(d)

To explain: Consignment and reporting for consignment.

Answer 13

To determine

(d)

To explain: Consignment and reporting for consignment.

Answer 14

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Answer 15

Expert Solution & Answer

Answer 16

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Answer 17

Ch. 8 - Prob. 1Q Ch. 8 - 2. Why should inventories be included in (a) a...Ch. 8 - 3. What is the difference between a perpetual...Ch. 8 - Prob. 4Q Ch. 8 - Prob. 5Q Ch. 8 - Prob. 6Q Ch. 8 - Prob. 7Q Ch. 8 - Prob. 8Q Ch. 8 - Prob. 9Q Ch. 8 - Prob. 10Q

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(b)

To explain: Should S Enterprises include freight-in expenditures as an inventory cost? Why?

(c)

To explain: If S Enterprises purchases its goods on terms 2/10, net 30, should the purchases be recorded gross or net? Why?

(d)

To explain: Consignment and reporting for consignment.

Want to see the full answer?

Chapter 8 Solutions

Concept explainers

Videos

(b) To explain: Should S Enterprises include freight-in expenditures as an inventory cost? Why?

(c) To explain: If S Enterprises purchases its goods on terms 2/10, net 30, should the purchases be recorded gross or net? Why?

(d) To explain: Consignment and reporting for consignment.

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Chapter 8 Solutions

(b)

To explain: Should S Enterprises include freight-in expenditures as an inventory cost? Why?

(c)

To explain: If S Enterprises purchases its goods on terms 2/10, net 30, should the purchases be recorded gross or net? Why?

(d)

To explain: Consignment and reporting for consignment.