Provide justification on what inventory costing assumption you choose. Record journal entries for each purchase and...

 

 

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Provide justification on what inventory costing assumption you choose. Record journal entries for each purchase and sales transaction listed. Your justification should be between 500 to 750 words in length. Part #3 You will need to submit a budget report to the CEO, including an explanation of the utility of master budgets. You will also submit a variance report that shows how the company is performing versus budgeted amounts. Use the following data. Amount of Goods Sold Per Quarter: Q2 Q3 Q4 Q1 Chairs sold per quarter 900 950 1000 1150 1150 1200 1250 1400 Tables sold per quarter Dressers sold per quarter 650 700 750 900 Target Sales Goal Per Quarter: Goods Quantity Chairs 1300 Tables 1100 Dressers 800 Q1 beginning inventory: Goods Quantity Chairs 120 Tables 90 Dressers 70 Assume that the material and labor costs from Part 1 are standards. Compare those standard costs to the actual amounts listed below. These are the actual amounts used for the entire fiscal year: Actual amount of wood purchased and used 46,120 bd. ft. Actual cost of wood purchased and used $80,028 Actual amount of direct labor hours 17,900 Actual cost of direct labor $275,550 Within your analysis, make sure to include the following: Provide an income statement for each of the two methods. Recommend one of the two final costing methods, providing justification for your final costing method selection. Your justification should be between 1,000 to 1,500 words in length. Part #2 Determine what inventory cost flow assumption (weighted average, FIFO and/or LIFO) would be best suited for valuing inventory near the current replacement cost. You will make your analysis based on the following inventory transactions involving chairs only. Remember that the sales price of chairs is $180 per unit according to the table in Part 1. Transaction Goods Price 120 1/1 Beginning Inventory $120/unit chairs 1/15 Transferred into finished goods 140 $130/unit chairs 110 3/15 Sold $180/unit chairs 4/15 Transferred into finished goods 100 $140/unit chairs 6/15 Sold 90 chairs $180/unit 7/15 Transferred into finished goods 130 $150/unit chairs 120 9/15 Sold $180/unit chairs 10/15 Transferred into finished 140 $160/unit goods chairs 110 12/15 Sold $180/unit chairs Within your analysis, make sure to include the following: Briefly discuss the advantages and disadvantages of each inventory costing assumption. Calculate the cost of goods sold and ending inventory for each cost flow assumption. Demonstrate which of these should be used to net the highest income during inflationary periods. Provide justification on what inventory costing assumption you choose. Record journal entries for each purchase and sales transaction listed. Your justification should be between 500 to 750 words in length. Part #3 You will need to submit a budget report to the CEO, including an explanation of the utility of master budgets. You will also submit a variance report that shows how the company is performing versus budgeted amounts. Use the following data. Amount of Goods Sold Per Quarter: Q2 Q3 Q4 Q1 Chairs sold per quarter 900 950 1000 1150 1150 1200 1250 1400 Tables sold per quarter Dressers sold per quarter 650 700 750 900 Target Sales Goal Per Quarter: Goods Quantity Chairs 1300 Tables 1100 Dressers 800 Q1 beginning inventory: Goods Quantity Chairs 120 Tables 90 Dressers 70 Assume that the material and labor costs from Part 1 are standards. Compare those standard costs to the actual amounts listed below. These are the actual amounts used for the entire fiscal year: Actual amount of wood purchased and used 46,120 bd. ft. Actual cost of wood purchased and used $80,028 Actual amount of direct labor hours 17,900 Actual cost of direct labor $275,550 Within your analysis, make sure to include the following: Provide an income statement for each of the two methods. Recommend one of the two final costing methods, providing justification for your final costing method selection. Your justification should be between 1,000 to 1,500 words in length. Part #2 Determine what inventory cost flow assumption (weighted average, FIFO and/or LIFO) would be best suited for valuing inventory near the current replacement cost. You will make your analysis based on the following inventory transactions involving chairs only. Remember that the sales price of chairs is $180 per unit according to the table in Part 1. Transaction Goods Price 120 1/1 Beginning Inventory $120/unit chairs 1/15 Transferred into finished goods 140 $130/unit chairs 110 3/15 Sold $180/unit chairs 4/15 Transferred into finished goods 100 $140/unit chairs 6/15 Sold 90 chairs $180/unit 7/15 Transferred into finished goods 130 $150/unit chairs 120 9/15 Sold $180/unit chairs 10/15 Transferred into finished 140 $160/unit goods chairs 110 12/15 Sold $180/unit chairs Within your analysis, make sure to include the following: Briefly discuss the advantages and disadvantages of each inventory costing assumption. Calculate the cost of goods sold and ending inventory for each cost flow assumption. Demonstrate which of these should be used to net the highest income during inflationary periods.