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Inventory Basics
Inventory cost flow
Inventory Valuation
Inventory Management
100

The two (2) types of inventories?

Merchandising and manufacturing inventory

100
Inventory on hand
What is closing stock
100
The inventory method gives the most realistic net income
What is LIFO
100
The two primary decisions to be made in inventory management are
What is when to order and how much to order
200

The level of inventory a firm holds is trade off between?

What is costs and benefits

200
Inventory sold becomes
What is cost of goods sold
200
This valuation method increases taxable income when prices are rising
What is FIFO
200
The length of time between placing and receiving an inventory order. Normally expressed in days, weeks and months
What is lead time
300

What is the advantage of keeping little or no stock?

Lower storage cost

300
The account that working process is transferred to
What are Finished goods
300

The cost of goods available for sale divided by the number of units available for sale.

What is average cost valuation method

300
The two (2) main inventory costs are:
What is carrying and ordering costs
400

Material management is defined as the..

Material management is concerned with planning, organizing and controlling the flow of material from initial purchase to destination.

400
The account that raw materials, direct labour and manufacturing overheads are transferred to
What is working process?
400
Given the following data, what would the income tax amount be if the company uses FIFO? Beginning inventory 400 units at $16 Purchases 1,600 units at $19 Units sold 1,200 units at $45 Operating expenses $10,000 Tax rate 40%
What is $8,960.00
400
Name the five (5) cost categories that Cost of goods sold fall in.
What is Purchasing Costs, Ordering Costs, Carrying Costs, Stockout Costs & Quality Costs
500

What is safety stock?

Extra Inventory.

500
What happens to production and sales if you don't have the inventory you need?

Production will stop and so will revenue.

500
Given the following data, what would the net income be if the company uses LIFO? Beginning inventory 400 units at $16 Purchases 1,600 units at $19 Units sold 1,200 units at $45 Operating expenses $10,000 Tax rate 40%
What is $12,720.00
500
With this system manufacturers coordinate production with suppliers so that raw materials or components arrive just as they are needed in the production process
What is JIT