ma 2 Flashcards
1
Q
Methods of valuing closing inventory
A
- FIFO(First in, First Out)
- LIFO(Last in, First Out)
- Weighted Avg
2
Q
FIFO
A
Materials issued out of inventory in the same order in which they were delivered into inventory.
3
Q
LIFO
A
Materials are issued out of inventory in the reverse order to which they were delivered into inventory
4
Q
Weighted AVG
A
Calculates the avg cost after each issue of materials
5
Q
Costs involved in inventory ordering systems:
A
- Purchase cost
- Reorder cost
- Inventory holding cost
6
Q
Purchase cost
A
Cost of actually purchasing goods
7
Q
Reorder cost
A
Cost of placing orders includes admin time for placing order, and delivery cost
8
Q
Inventory holding cost
A
Cost of holding items in inventory such as warehouse space and insurance
