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June 25, 2013 at 10:44 pm
Please someone help, I don’t understand how the 500 units are used for calculation in the FIFO approach asked in Example 5. Why are we looking for and stop at 500 units?
June 26, 2013 at 4:52 am
The question asks to calculate the value of closing inventory. To calculate the number of units for closing inventories, we can say… Opening Inventory Units + Purchased Units – Sold Units = Closing Inventory Units 300 + (400+400+400) – (500+400+100) = 500 units
Maybe you were thinking of cost of sales: Cost of Sales = Opening Inventory + Purchases – Closing Inventories
September 30, 2013 at 2:31 pm
Thanks so much
June 15, 2013 at 5:56 pm
Why does a higher closing inventory lead to a higher profit and lower closing inventory lead to a lower profit? The more units you have in closing inventory the less you sold in the year, thus it should be the more closing inventory the lower the profit. Help me understand.
John Moffat says
June 16, 2013 at 3:29 pm
We are assuming that the sales are the same. In which case the higher the closing inventory means the lower the cost of what was sold. The lower the cost of sales then the higher the profit.
June 17, 2013 at 1:13 am
May 3, 2013 at 3:53 pm
Thanks Opentuition, Am very, very grateful, you have helped me a great deal
December 2, 2012 at 6:19 pm
hullos, cant connect… always getting this nagging message: server not found!!!!
December 2, 2012 at 6:23 pm
Your PC/internet is behind a firewall. contact your internet provider to help you out
November 27, 2012 at 4:10 pm
5 Dollars for a pen? You need to change a supplier man…
November 27, 2012 at 5:38 pm
@coolgirl1984, But you don’t know what a wonderful pen it is 🙂
November 27, 2012 at 5:55 pm
@johnmoffat, That would only the salesperson say! 😉
October 19, 2012 at 7:35 pm
wow amazing and interesting lecture…… everything has explained very keen and clearly….thnxxxxxx
September 2, 2012 at 11:41 am
HI! I have an exam tomorow so pleasee help me quick! Test Q2: why does the answer include administrative overheads?? Shouldn’t only production costs be included? and here there is only carriage inwards and no other….though I am confused about whether we could include factory plant depreciation… what is meant by general administrative overheads? Please Help!
July 11, 2012 at 10:39 am
Amazing…. very usefull
June 17, 2012 at 10:56 pm
a very gud lecture keep up the good work
May 15, 2012 at 5:42 pm
Hello, I have a similar exercise in Kaplan Exam Kit(exercise 26/page 8): A. buys and sells inventory during the month of August as follow: Opening inventory-100 units 2.52/unit 4 August -sales 20 units 8 August-purchases 140 units 2.56/unit 10 August-sales 90 units 18 august Purchases 200 units 2.78/unit 20 August Sales 180 units The AVCO is calculatedas follows: 100 units*2.52=252 140units*2.56=358 200 units*2.78=556 average cost per unit(252+358+556)/440=2.65 Closing inventory 150*2.65=397.5 The question is if I follow the Kaplan’s way and do the exercise which we have in a lecture the result is completly different.I’m confused and do not know what is correct
April 12, 2012 at 10:11 pm
Good evening! Could you explain me one thing? I’m confused very much! Why in FIFO approach do we take not oldest units (300* 12 and 200*12,50), but latest (400*15 and 100*14)? It’s not the “first-in” units, but last!
I’m waiting for your reply!
April 13, 2012 at 7:33 am
@mariazhadan, with FIFO, it is the oldest units that are sold first. This means that the units left are always the newest.
December 5, 2011 at 2:08 am
Thank you much……
November 15, 2011 at 12:27 pm
exellent…lot better explained then in the class
$eep Rock$ says
January 25, 2012 at 3:23 pm
@monik, most certainly
October 25, 2011 at 6:51 pm
DA CEILSO says
October 25, 2011 at 12:23 am
hi this is wonderful the lecture is perfect please keep it up open tuition job well done
October 24, 2011 at 5:46 pm
tanks sooooo much
October 19, 2011 at 1:11 pm
THANK U FOR THAT
October 6, 2011 at 4:38 am
October 2, 2011 at 9:28 am
April 19, 2011 at 9:53 am
thanks and good explaination . keep it up opentuition people.
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