Session 9

Question 1

Inventory Costing Methods

Answer 1

1) Specific-unit-cost- method
2) Weighed-average cost
3) First-in, First-out (FIFO) cost

• These inventory costing methods produce different amounts for:
  
  • Ending inventory
  • COGS

Question 2

Specific-Unit cost

Answer 2

• It uses the specific cost of each unit of inventory for item that have a distinctive identity
• it is rarely used in practice

Question 3

First-In, First-Out (FIFO)

Answer 3

• The first costs incurred every period are the first costs assigned to cost of goods when they are sold
• The last (most recent) costs incurred during the period correspond to the ending inventory

Question 4

Moving-Weighted-Average-Cost Method

Answer 4

• The business computes a new weighted-average cost per unit after each purchase
• Ending inventory and cost of goods sold are then bases most recent weighted-average cost per unit
• Average cost per unit is calculated as follows:

(Total cost of inventory on hand ÷ Number of units on hand)

Question 5

Accounting Information System

Answer 5

= Combination of record and procedures. that a business uses to meet its needs for financial data

• The system collects information, processes it, and produces reports that meet the users’ needs.