Flashcards
Ch. 18 - Inventory and Overhead
Cards in this deck (14)
- 1Perpetual Inventory SystemInventory records are continually updated; opposite of periodic inventory system
- 2Periodic Inventory SystemPhysical count of inventory taken at end of a time period. Inventory records are not continually updated
- 3Specific Identification MethodThis method calculates the cost of ending inventory by identifying each item remaining to invoice price
- 4Weighted Average MethodCalculates the cost of ending inventory by applying an average unit cost to items remaining in inventory for that period of time
- 5First-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
- 6Last-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
- 7Retail MethodMethod to estimate cost of ending inventory. The cost ratio times ending inventory at retail equals the ending cost of inventory
- 8Gross Profit MethodUsed to estimate value of inventory
- 9Inventory TurnoverRatio that indicates how quickly inventory turns
- 10Average InventoryTotal of all inventories divided by number of times inventory taken
- 11Just-in-time (JIT) Inventory SystemSystem that eliminates inventories. Suppliers provide materials daily as manufacturing company needs them
- 12Overhead expensesOperating expenses not directly associated with a specific department or product
- 13Distribution of overheadCompanies distribute overhead by floor space or sales volume
- 14—
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- Assigning Costs to Ending Inventory; Retail and Gross Profit Method
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- Brooke Young
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