Managerial Function

Managerial Function

  • Submitted By: behold
  • Date Submitted: 06/21/2009 10:04 PM
  • Category: Miscellaneous
  • Words: 1345
  • Page: 6
  • Views: 936

1 A perpetual inventory system offers which of the following advantages?
A. Inventory balances have to be counted to be accurate.
B. This system is used for inexpensive goods.
C. This system is more expensive than a periodic system.
D. This system helps to determine if there is a sufficient supply of inventory on hand to fill customer orders, just by reviewing the inventory records.
2 Deciding on which inventory method a company should use affects:
A. the profits to be reported.
B. the income taxes to be paid.
C. the values of ratios reported from the balance sheet.
D. all of the above.
3 BMX Co.sells item XJ15 for $1,000 per unit, and has a cost of goods sold percentage of 80%. The gross profit to be found for selling 20 items is:
A. $20,000.
B. $16,000.
C. $ 4,000.
D. No gross margin can be calculated with a cost of goods sold percentage greater than 50%.
4 A company whose inventory consists of very unique items would probably use which inventory method?
A.F-in, first-out
B.Last-in, first-out
C. Specific unit cost
D. Weighted-average of only the unique items

5 Given the following data, calculate the cost of ending inventory using the LIFO costing method.
Beginning inventory
30 units at $10 per unit
Purchase of inventory
15 units at $12 per unit
Purchase of inventory
25 units at $13 per unit
Purchase of inventory
20 units at $14 per unit
Purchase of inventory
25 units at $15 per unit
Ending inventory
65 units

A. $915
B. $740
C. $720
D. $545
6 When the FIFO method is used, ending inventory is assumed to consist of the:
a.units with the lowest per unit cost.
b.units with the highest per unit cost.
C. oldest units.
D. most recently purchased units.
7 All of the following are reasons for choosing the FIFO versus the LIFO costing method EXCEPT:
A. FIFO reports the most up-to-date inventory values on the balance sheet.
B. FIFO generally results in higher income...

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