TAILIEUCHUNG - Lecture Practical business math procedures (11/e) - Chapter 18: Inventory and overhead

After studying this chapter you will be able to: list the key assumptions of each inventory method, calculate the cost of ending inventory and cost of goods sold for each inventory method, calculate the cost ratio and ending inventory at cost for the retail method, calculate the estimated inventory using the gross profit method, explain and calculate inventory turnover, explain overhead; allocate overhead according to floor space and sales. | INVENTORY AND OVERHEAD Chapter Eighteen Copyright © 2014 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin 1 List the key assumptions of each inventory method. Calculate the cost of ending inventory and cost of goods sold for each inventory method. LU 18-1: Assigning Costs to Ending Inventory - Specific Identification; Weighted Average; FIFO; LIFO Learning unit objectives LU 18-2: Retail Method; Gross Profit Method; Inventory Turnover; Distribution of Overhead Calculate the cost ratio and ending inventory at cost for the retail method. Calculate the estimated inventory using the gross profit method. Explain and calculate inventory turnover. Explain overhead; allocate overhead according to floor space and sales. 2 18- Perpetual Inventory System – Keeps a running account of inventory by updating with each transaction. Inventory Systems Periodic Inventory System – Relies on a physical count of inventory done periodically. 3 Number of Cost Total Units Purchased per

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