You work for a made-to-order clothing company, whose reputation is based on its fast turnaround from order to delivery. The owner of your company is considering out-sourcing much of the clothing production because she thinks this will improve inventory turnover and customer satisfaction. In what way is she correct? In what way might she be wrong?
Answer to relevant QuestionsDistinguish perpetual inventory systems from periodic inventory systems by describing when and how cost of goods sold is calculated when using LIFO. Contrast the income statement effect of LIFO versus FIFO (on Cost of Goods Sold and Gross Profit) when (a) costs are rising and (b) costs are falling. Indicate the most likely effect of the following changes in inventory management on the inventory turnover ratio (1 for increase, 2 for decrease, and NE for no effect). _____ a. Inventory delivered by suppliers daily (small ...For each of the following, indicate whether it would be reported on the balance sheet (B/S), reported on the income statement (I/S), or not shown in the company’s financial statements (Not). _____ a. Sales Revenue _____ b. ...David H. Brooks, a university graduate with an accounting degree and the former CEO of DHB Industries, Inc., was charged in October 2007 with accounting and securities fraud for failing to report the company’s inventory at ...
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