Flashcards
Chapter 18
Cards in this deck (11)
- 1Specific identification methodThis method calculates the cost of ending inventory by identifying each item remaining to invoice price, 478–479.
- 2Weighted-average methodCalculates the cost of ending inventory by applying an average unit cost to items remaining in inventory for that period of time, 479–480, 482.
- 3First-in, first-out (FIFO) methodThis method assumes the first inventory brought into the store will be the first sold. Ending inventory is made up of goods most recently purchased, 480, 482.
- 4Last-in, first-out (LIFO) methodThis method assumes the last inventory brought into the store will be the first sold. Ending inventory is made up of the oldest goods purchased, 481–482.
- 5Retail methodMethod to estimate cost of ending inventory. The cost ratio times ending inventory at retail equals the ending cost of inventory, 483.
- 6Gross profit methodUsed to estimate value of inventory, 484.
- 7Inventory turnoverRatio that indicates how quickly inventory turns:
- 8Average inventoryTotal of all inventories divided by number of times inventory taken, 484.
- 9Just-in-time (JIT) inventory systemSystem that eliminates inventories. Suppliers provide materials daily as manufacturing company needs them, 485.
- 10Overhead expensesOperating expenses not directly associated with a specific department or product, 216, 485.
- 11Distribution of overheadCompanies distribute overhead by floor space or sales volume, 485–486.