Flashcards
Key Terms for Chapter 18
Cards in this deck (13)
- 1Average InventoryTotal of all inventories divided by number of times inventory taken
- 2Distribution of OverheadCompanies distribute overhead by floor space or sales volume
- 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
- 4Gross Profit MethodUsed to estimate value of inventory
- 5Inventory TurnoverRatio that indicates how quickly inventory turns
- 6Just-in-Time (JIT) Inventory SystemSystem that eliminates inventories. Suppliers provide materials daily as manufacturing company needs them
- 7Last-In, First-Out (LIFE) MethodThis method assumes the last inventory brought into the store will be the first sold. Ending inventory is made up of oldest goods purchased
- 8Overhead ExpensesOperating expenses not directly associated with a specific department or product
- 9Periodic Inventory SystemPhysical count of inventory taken at end of a time period. Inventory records are not continually updated
- 10Perpetual Inventory SystemInventory Records are continually updated; opposite of periodic inventory system
- 11Retail MethodMethod to estimate cost of ending inventory. The cost ratio times ending inventory at retail equals the ending cost of inventory
- 12Specific Identification MethodThis method calculates the cost of ending inventory by identifying each item remaining to invoice price
- 13Weighted-Average MethodCalculates the cost of ending inventory by applying an average unit cost to items remaining in inventory for that period of time
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- Chapter 18 Key Terms of "Practical Business Math Procedures" by Jeffrey Slate
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- Laura Samuelson
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