Retail inventory method : It takes into account all the retail amounts that is, the current selling prices. Under this method, the goods available for sale, at retail is deducted from the sales, at retail to determine the ending inventory, at retail. Conventional Retail Method: Conventional retail method refers to the estimation of the lower of average cost or market by eliminating the markdowns from the calculation of the cost-to-retail percentage. In this case, the cost-to-retail percentage will be determined by dividing the goods available for sale at cost by the goods available for at retail (excluding markdowns). Thus, the conventional retail method will always result in lower estimation of ending inventory when the markdowns exist. To Prepare: The schedule computing estimated lower of cost or market (LCM) inventory for October 31, 2018.

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Answer 1

Question

Chapter 9, Problem 9.8P

1.

To determine

Retail inventory method: It takes into account all the retail amounts that is, the current selling prices. Under this method, the goods available for sale, at retail is deducted from the sales, at retail to determine the ending inventory, at retail.

Conventional Retail Method: Conventional retail method refers to the estimation of the lower of average cost or market by eliminating the markdowns from the calculation of the cost-to-retail percentage.

In this case, the cost-to-retail percentage will be determined by dividing the goods available for sale at cost by the goods available for at retail (excluding markdowns). Thus, the conventional retail method will always result in lower estimation of ending inventory when the markdowns exist.

To Prepare: The schedule computing estimated lower of cost or market (LCM) inventory for October 31, 2018.

2.

To determine

To Mention: The factors that have caused the difference between computed inventory and the physical count.

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Luke Production applies overhead using a normal costing approach based on direct labor-hours. The budgeted factory overhead was $420,000, and the budgeted direct labor-hours were 28,000. The actual factory overhead was $438,900, and the actual direct labor-hours were 29,200. How much overhead would be applied to production?

The Frontier Manufacturing had 7,200 actual direct labor hours at an actual rate of $18.75 per hour. Original production had been budgeted for 950 units, but only 900 units were actually produced. Labor standards were 9.2 hours per completed unit at a standard rate of $17.50 per hour. Compute the direct labor cost variance.

Answer 2

Question

Chapter 9, Problem 9.8P

1.

To determine

Retail inventory method: It takes into account all the retail amounts that is, the current selling prices. Under this method, the goods available for sale, at retail is deducted from the sales, at retail to determine the ending inventory, at retail.

Conventional Retail Method: Conventional retail method refers to the estimation of the lower of average cost or market by eliminating the markdowns from the calculation of the cost-to-retail percentage.

In this case, the cost-to-retail percentage will be determined by dividing the goods available for sale at cost by the goods available for at retail (excluding markdowns). Thus, the conventional retail method will always result in lower estimation of ending inventory when the markdowns exist.

To Prepare: The schedule computing estimated lower of cost or market (LCM) inventory for October 31, 2018.

2.

To determine

To Mention: The factors that have caused the difference between computed inventory and the physical count.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 3

Question

Chapter 9, Problem 9.8P

1.

To determine

Retail inventory method: It takes into account all the retail amounts that is, the current selling prices. Under this method, the goods available for sale, at retail is deducted from the sales, at retail to determine the ending inventory, at retail.

Conventional Retail Method: Conventional retail method refers to the estimation of the lower of average cost or market by eliminating the markdowns from the calculation of the cost-to-retail percentage.

In this case, the cost-to-retail percentage will be determined by dividing the goods available for sale at cost by the goods available for at retail (excluding markdowns). Thus, the conventional retail method will always result in lower estimation of ending inventory when the markdowns exist.

To Prepare: The schedule computing estimated lower of cost or market (LCM) inventory for October 31, 2018.

2.

To determine

To Mention: The factors that have caused the difference between computed inventory and the physical count.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 4

Question

Chapter 9, Problem 9.8P

1.

To determine

Retail inventory method: It takes into account all the retail amounts that is, the current selling prices. Under this method, the goods available for sale, at retail is deducted from the sales, at retail to determine the ending inventory, at retail.

Conventional Retail Method: Conventional retail method refers to the estimation of the lower of average cost or market by eliminating the markdowns from the calculation of the cost-to-retail percentage.

In this case, the cost-to-retail percentage will be determined by dividing the goods available for sale at cost by the goods available for at retail (excluding markdowns). Thus, the conventional retail method will always result in lower estimation of ending inventory when the markdowns exist.

To Prepare: The schedule computing estimated lower of cost or market (LCM) inventory for October 31, 2018.

2.

To determine

To Mention: The factors that have caused the difference between computed inventory and the physical count.

Expert Solution & Answer

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Check out a sample textbook solution

See solution

Answer 5

Chapter 9, Problem 9.8P

1.

To determine

Retail inventory method: It takes into account all the retail amounts that is, the current selling prices. Under this method, the goods available for sale, at retail is deducted from the sales, at retail to determine the ending inventory, at retail.

Conventional Retail Method: Conventional retail method refers to the estimation of the lower of average cost or market by eliminating the markdowns from the calculation of the cost-to-retail percentage.

In this case, the cost-to-retail percentage will be determined by dividing the goods available for sale at cost by the goods available for at retail (excluding markdowns). Thus, the conventional retail method will always result in lower estimation of ending inventory when the markdowns exist.

To Prepare: The schedule computing estimated lower of cost or market (LCM) inventory for October 31, 2018.

2.

To determine

To Mention: The factors that have caused the difference between computed inventory and the physical count.

Answer 6

Chapter 9, Problem 9.8P

1.

To determine

Retail inventory method: It takes into account all the retail amounts that is, the current selling prices. Under this method, the goods available for sale, at retail is deducted from the sales, at retail to determine the ending inventory, at retail.

Conventional Retail Method: Conventional retail method refers to the estimation of the lower of average cost or market by eliminating the markdowns from the calculation of the cost-to-retail percentage.

In this case, the cost-to-retail percentage will be determined by dividing the goods available for sale at cost by the goods available for at retail (excluding markdowns). Thus, the conventional retail method will always result in lower estimation of ending inventory when the markdowns exist.

To Prepare: The schedule computing estimated lower of cost or market (LCM) inventory for October 31, 2018.

Answer 7

Chapter 9, Problem 9.8P

1.

To determine

Retail inventory method: It takes into account all the retail amounts that is, the current selling prices. Under this method, the goods available for sale, at retail is deducted from the sales, at retail to determine the ending inventory, at retail.

Conventional Retail Method: Conventional retail method refers to the estimation of the lower of average cost or market by eliminating the markdowns from the calculation of the cost-to-retail percentage.

In this case, the cost-to-retail percentage will be determined by dividing the goods available for sale at cost by the goods available for at retail (excluding markdowns). Thus, the conventional retail method will always result in lower estimation of ending inventory when the markdowns exist.

To Prepare: The schedule computing estimated lower of cost or market (LCM) inventory for October 31, 2018.

Answer 8

2.

To determine

To Mention: The factors that have caused the difference between computed inventory and the physical count.

Answer 9

2.

To determine

To Mention: The factors that have caused the difference between computed inventory and the physical count.

Answer 10

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Answer 11

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Answer 12

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Answer 13

Ch. 9 - Explain the (a) lower of cost or net realizable...Ch. 9 - What are the various levels of aggregation to...Ch. 9 - Describe the alternative approaches for recording...Ch. 9 - Explain the gross profit method of estimating...Ch. 9 - The Rider Company uses the gross profit method to...Ch. 9 - Explain the retail inventory method of estimating...Ch. 9 - Both the gross profit method and the retail...Ch. 9 - Define each of the following retail terms: initial...Ch. 9 - Explain how to estimate the average cost of...Ch. 9 - Prob. 9.10Q

Solution Summary: The author explains the cost-to-retail method, which takes into account all the retail amounts that is, the current selling prices, to determine the ending inventory, at retail.

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To Mention: The factors that have caused the difference between computed inventory and the physical count.

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