Chapter 5 accounting

Homestead Crafts, a distributor of handmade gifts, operates out of owner Emma Finn's house. At the end of the current period, Emma looks over her inventory and finds that she has 1,600 units (products) in her basement, 26 of which were damaged by water and cannot be sold. 180 units in her van, ready to deliver per a customer order, terms FOB destination. 170 units out on consignment to a friend who owns a retail store. How many units should Emma include in her company's period-end inventory?

Aunits of product on hand= 1600 add units of transit=180 add units of consignment=170 less damaged units=26 =total units in period-end inventory

A car dealer acquires a used car for $16,000, with terms FOB shipping point. Compute total inventory costs assigned to the used car if additional costs include 1. $130 for transportation-in. 2. $150 for shipping insurance. 3. $920 for car import duties. 4. $200 for advertising. 5. $2,000 for sales staff salaries. 6. $110 for trimming shrubs.

Cost included 1. invenotry cost 2. inventory cost 3. invenotry cost 4. incurred 5. incurred 6. incurred

Inventory Turnover

cost of goods sold/average inventory(ending invenotry of (year 2 + year 1)/2) Days sales in inventory= ending inventory/ cost of goods sold

Fifo

take out from the first then whats left over from the last one