Inventory Management: Costing Methods & Journal Entries
Perpetual Inventory System
The perpetual inventory system continuously updates inventory records to reflect purchases, sales, and returns.
Inventory Costing Methods
Gross Profit Method
Estimates the cost of goods sold based on the gross profit percentage and net sales.
Specific Identification
Tracks the cost of each individual item sold and remaining in inventory.
Weighted-Average Method
Calculates the average cost per unit and applies it to both cost of goods sold and ending inventory.
First-In, First-Out
Read MoreABC Inventory Analysis and Economic Order Quantity
Problem #12-1:
The Welsh Corporation uses 10 key components in one of its manufacturing plants. Perform an ABC analysis from the data shown below. Explain your decisions and logic.
SKU | Item Cost $ | Annual Demand |
WC219 | 0.10 | 12,000 |
WC008 | 1.20 | 22,500 |
WC916 | 3.20 | 700 |
WC887 | 0.41 | 6,200 |
WC397 | 5.00 | 17,300 |
WC654 | 2.10 | 350 |
WC007 | 0.90 | 225 |
WC419 | 0.45 | 8,500 |
WC971 | 7.50 | 2,950 |
WC713 | 10.50 | 1,000 |
Problem #12-2:
The following table contains figures on the monthly volume and unit costs for a random sample of 16 items from a list of 2,000 inventory items
Read MoreProbability Concepts and Standard Normal Distribution
Probability of Events
Calculating Probability
- Define the experiment and observation process.
- List the sample space (SP).
- Assign probabilities to each outcome in the SP.
- Identify the outcomes within the event of interest.
- Sum the probabilities of those outcomes.
Set Operations
- Union (A u B): Occurs if either A, B, or both occur. Includes all outcomes in A or B or both.
- Intersection (A n B): Occurs if both A and B occur. Includes outcomes common to both A and B.
- Complement (A^c): Occurs if A does not occur.
Statistics: Regression Analysis, Sampling Methods, and Quantitative Research
Regression Analysis
Regression table:
Multiple R: coefficient of correlation (0,0995) → 9,95% of variability in BMI (Y) is connected with 9,95% of the variability in age (X).
R square: coefficient of determination (0,0099) → 0,99% of variance in BMI (Y) is explained by our regression model.
St error in kg/m2: the prediction of the BMI (X) made using our model will different from reality by around 5,677 kg/m2.
Obs: we have a total of 400 obs in our model.
Intercept (B0)
Coefficients: if the age will
Read MoreUnderstanding Statistics: Techniques, Methods, and Analysis
Statistics
S: refers to the body of techniques used for collecting, organizing & interpreting data. Data may be quantitative, with values expressed numerically or qualitative with characteristics being tabulated. S is used in bs to help make better decisions by understanding variation & relationships in data.
Descriptive Statistics
Techniques that are used to summarize & describe numerical data for the purpose of easier interpretation (can be graphical or involve computational analysis)
Read MoreUnderstanding Statistical Studies: Definitions and Methods
Individuals and Variables
Individuals are objects described by a set of data (people, objects, or animals).