return (credit or cash) purchase returns (credit or cash) delivery costs = freight out Pay Supplier Buy Inventory On Credit Sell On Credit Customer Pays ‘most retailers are registered for GST’ To work out GST on a price divide the number by 11 and without GST on a price add 10% Two Inventory Systems 1. Periodic 2. Perpetual Periodic Inventory Systems * is normally used for relatively inexpensive goods Perpetual Inventory * keeps a running computerized record of
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Cost Accounting – Classification of costs Cost accounting refers to a process of accumulating‚ recording‚ classifying and analyzing all costs incurred at various levels of production. The purpose of cost accounting is manifold. It provides a final selling price‚ suggests the best possible course of action where maximum savings are possible and a strategy for future. Cost accounting is also constructive in comparing the input and output results that ultimately aids the management to arrive at a financial
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would you recommend that Pepe do? Give the data in the case‚ perform a financial analysis to evaluate the alternatives that you have identified( Assume that the new inventory could be valued as six week;s worth of the yearly cost of sales. Use a 30 percent inventory carrying cost rate.) Calculate a pay-back period for each alternative. In this case‚ Pepe Jeans has enjoyed considerable financial success with its current business model. However‚ on the other hand‚ individual retailers are compliant
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of St. Thomas Opus College of Business P. Jane Saly University of St. Thomas Opus College of Business Introduction furniture‚ are based on classic designs that change somewhat over time. Seasonal products‚ mainly soft goods‚ upholstery‚ and small hard goods‚ change frequently. The introduction of seasonal products has become a year-round job for the company designers and buyers. Designers continually work with new color schemes‚ fabrics‚ and materials. Buyers arrange one-time purchases
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improve his company’s operations if he better manages his inventory. Mr. Milligan requests your help in preparing an Inventory Analysis worksheet. The Inventory Analysis worksheet provides Mr. Milligan with information about his annual sales‚ cost of goods sold‚ gross profit‚ and markup on this products. Preparing the worksheet for Mr. Milligan requires you to insert columns‚ use several functions‚ and apply proper formatting to the worksheet and cells. CASE SCENARIO Ten years ago
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| |Cost of goods sold calculation | | | | Opening stock |10‚ 000 | | | + purchases | 140‚ 000 | | | = goods available for sale
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Gaassett________________ Multiple Choice Questions *Highlight Your Answer Chapter 6 1-30. Operating income is: A. A measure of profitability after deducting cost of sales from net sales. B. A measure of profitability after deducting cost of sales and all expenses incurred in operating the business from net sales. C. A measure of liquidity after deducting cost of sales from net sales. D. The equivalent of net sales 2-35. Which of the following would not tend to make a manufacturer choose a perpetual inventory
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complete‚ and b. measurability reasonably assured 2. Collectibility is reasonably assured “Earnings process” is substantially complete. Operational functions firm that ADD VALUE in generation of revenue Varies across different firm Eg. Produce goods→sale →collect cash→provide after sale service Contract-Based Approach Contract-Based Approach Contract is recognized when all of the following conditions are met: 1. The entity is party to the contract‚ 2. The contractual rights are
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in a Profit and Loss Statement: cost of goods sold‚ operating expenses and non-operating expenses. a) Cost of Goods Sold (COGS) - includes all stock related expenses for the business e.g. purchases‚ freight inwards‚ customs duty etc. b) Operating expenses - include the normal day to day costs of the business except COGS and are broken into three groups: selling and distribution (costs incurred in promoting/selling goods); general and administrative (costs incurred in running the office and
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Actual revenue earned by Aalst in that quarter = 124‚080 Vehicles washed on average per hour during good weather = 24 Average revenue earned per vehicle = € 11 Hours of good weather in that quarter = 470 Hours of good bad in that quarter = 450 Vehicles washed on average per hour during bad weather = unknown variable x Those variables can be put into a mathematical equation where: (470 hours of good weather * 24 vehicles washed per hour * € 11 revenue per vehicle) + (450 hours of bad weather * x vehicles
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