. A customer who wants a coffee moves sequentially to 2 stations staffed by 4 employees in
a Starbucks:
Answers
The process capacity is 1/60 customers per second, and the bottleneck(s) of the process is(are) the coffee machines.
The process capacity can be determined by calculating the rate at which the process can serve customers. To do this, we need to identify the bottleneck(s) in the process.
Let's first consider the cash registers. Since there are two cash registers and each one takes 45 seconds to complete its task, the total time to serve a customer at the cash registers is 45 seconds. Therefore, the throughput at the cash registers is 1/45 customers per second.
Next, let's consider the coffee machines. Since there are two coffee machines and each one takes 60 seconds to make a coffee, the total time to make a coffee is 60 seconds. Therefore, the throughput at the coffee machines is 1/60 coffees per second.
Since the coffee machines have a lower throughput than the cash registers, they are the bottleneck in the process. The overall process capacity is limited by the throughput of the coffee machines, which is 1/60 coffees per second.
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Full Question:. A customer who wants a coffee moves sequentially to 2 stations staffed by 4 employees in a Starbucks: The customer first moves to one of the two cash registers where Alex and Bob are working. One of them places the order and accepts payment. There is one extra cash register where no one is working One of Charlotte and David makes the coffee using a coffee machine. Both Charlotte and David have their own coffee machines. There is one extra coffee machine which is not used by anyone. The task time of placing an order and accepting payment is 45 seconds. The task time of making a coffee is 60 seconds. Tasks Task time Place a order & accept payment 45 seconds Make a coffee 60 seconds Note: Alex & Bob take the same amount of time to do their tasks. Charlotte & David take the same amount of time to do their tasks.
(a) What is the process capacity and what is (are) the bottleneck(s) of the process?
Related Questions
how has the right to education addressed to differently able persons?How far is it appropriate to keep such provision with view of justice?Present your logics.
Answers
Answer:
,
Explanation:
i think this is answer right
All of the following would require use of the equity method for investments except:
a. Material intra-entity transactions.
b. Investor participation in the policy-making process of the investee.
c. Valuation at fair value.
d. Technological dependency.
e. Interchange of managerial personnel.
Answers
c. Valuation at fair value. The equity method is a technique of accounting for investments in enterprises over which the investor has considerable influence but not control.
The equity method entails including the investor's portion of the investee's earnings or losses into the investor's own financial statements. Except for "c. Valuation at fair value," the criteria given in the choices are normally features of assets that would necessitate the adoption of the equity method. A alternative accounting approach is "fair value valuation," which includes evaluating investments based on their market worth.The equity method is a technique of accounting for investments in enterprises over which the investor has considerable influence but not control.
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PLEASE HELP WILL GIVE BRAINLY!!!!
Explain how credit card companies make money on their cards. What is a credit card issuer?
Answers
Explanation:
1st question) they make money thru interest, processing fees (which is like a little tax on businesses for accepting credit) and fees charges to cardholders (some charge at ATMS for withdrawal etc).
a credit card issuer is a bank or credit union that supplies the credit card to the consumer. ex: capital one, citi, bank of america.
in general, why is it more expensive for a company to finance with equity capital than with debt capital?
Answers
Equity capital is generally more expensive than debt capital due to several reasons. These reasons include: Equity capital involves more risk than debt capital. Debt capital is borrowed money, and the lender expects to be repaid with interest. On the other hand, equity capital involves taking on investors who own a portion of the company.
Investors in equity capital expect to receive a return on their investment in the form of dividends and/or an increase in the value of their shares. Equity investors bear the risk of losing their investment if the company doesn't perform well. There is no fixed repayment schedule for equity capital.
Debt capital has a fixed repayment schedule. Equity capital, on the other hand, is considered an indefinite investment. Investors in equity capital expect to be compensated through returns on their investment, but they do not have a fixed repayment schedule. This means that if the company becomes profitable, it may have to share its earnings with equity investors for an indefinite period of time. This makes equity capital more expensive than debt capital. Equity capital comes with more strings attached than debt capital.
Equity investors usually expect some degree of control over the company's decision-making process. They may require a say in the company's strategy, management, or other aspects of its operation. This can be a costly expense for the company since it means giving up some control over its business to equity investors. These factors make equity capital more expensive than debt capital. However, there are also benefits to equity financing, such as not having to make interest payments or repay the principal amount borrowed.
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Your digital footprint includes information that others post about you online.
Answers
Answer:
is this true or false?
Explanation:
if it is, then true. if your name were to be searched it would pull up other stuff people online have mentioned about you.
Answer: the answer is false
Explanation:
i Got true wrong
As you move through your career and begin to seek promotions, it is helpful to ______. a. Target and train for specific career promotions which fit your needs b. Remain tied to traditional practices in a technologically advancing age c. Show commitment to always doing your job in the same way no matter what d. Compile your professional development and growth every ten years Please select the best answer from the choices provided.
Answers
Answer:
a.
Target and train for specific career promotions which fit your needs
Explanation:
In the last year, my company had revenues of 1.408 million euros. My COGS is 480,000 Euros. Allowance for bad debt and warranty was 200,000 Euros. SG&A was 617,500 Euros. Retained Earnings at the end of that period were 2.8 million Euros. Dividends in the amount of 21,100 Swiss Francs were paid in that period. What were the Retained Earnings at the beginning of the period?
2.
A company, based in Europe, has the following data related to its balance sheet. The current portion of the long-term debt is 2.5 million Euros. Current Liabilities are 5.4 million Euros and Current Assets are 7.9 million Euros. Long-Term Assets are 2.7 million Euros. Shareholder Equity is 1.3 million Euros. What are the Long-Term Liabilities?
Answers
1. The Retained Earnings at the beginning of the period were 1.7216 million Euros. 2. The Long-Term Liabilities of the company amount to 1.3 million Euros.
1. To calculate the Retained Earnings at the beginning of the period, we need to consider the net income for the period, which can be calculated by subtracting the cost of goods sold (COGS), allowance for bad debt and warranty, and selling, general, and administrative expenses (SG&A) from the total revenues.
Net Income = Revenues - COGS - Allowance for bad debt and warranty - SG&A
Net Income = 1,408,000 Euros - 480,000 Euros - 200,000 Euros - 617,500 Euros
Net Income = 110,500 Euros
Next, we need to consider the dividends paid during the period. Dividends reduce the retained earnings. In this case, the dividends paid were 21,100 Swiss Francs, which we need to convert to Euros.
Dividends in Euros = 21,100 CHF * (1 EUR / 1.12 CHF) = 18,839.29 Euros
Finally, we can calculate the Retained Earnings at the beginning of the period by subtracting the net income and dividends paid from the Retained Earnings at the end of the period.
Retained Earnings at the beginning = Retained Earnings at the end - Net Income - Dividends
Retained Earnings at the beginning = 2,800,000 Euros - 110,500 Euros - 18,839.29 Euros
Retained Earnings at the beginning = 1,721,660.71 Euros (rounded to 1.7216 million Euros)
2. The Long-Term Liabilities of the company amount to 0.5 million Euros.
To calculate the Long-Term Liabilities, we need to consider the total liabilities of the company and subtract the current liabilities. The difference between total liabilities and current liabilities represents the long-term liabilities.
Total Liabilities = Current Liabilities + Long-Term Liabilities
Long-Term Liabilities = Total Liabilities - Current Liabilities
Given the data:
Current Liabilities = 5.4 million Euros
Shareholder Equity = 1.3 million Euros
Total Liabilities can be calculated as:
Total Liabilities = Current Liabilities + Shareholder Equity
Total Liabilities = 5.4 million Euros + 1.3 million Euros
Total Liabilities = 6.7 million Euros
Now, we can calculate the Long-Term Liabilities:
Long-Term Liabilities = Total Liabilities - Current Liabilities
Long-Term Liabilities = 6.7 million Euros - 5.4 million Euros
Long-Term Liabilities = 1.3 million Euros
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What are some reasons that a bank statement might not match a cash balance of a business's records? Choose all answers that are correct.
Question 1 options:
posted payments on credit cards
bank errors
outstanding deposits
service charges
recorded checks
outstanding checks
Answers
Answer:
outstanding deposits, outstanding checks, posted payments on credit cards
Explanation:
Bank errors, Outstanding Deposits, Service Charges, and Outstanding checks are some reasons that a bank statement might not match the cash balance of a business's records. The correct options are B, C, D, and F.
What information does a bank statement provide?Name, address, account number, and bank branch information are all listed on bank statements for account holders. Additionally, a summary table that displays the statement's time frame, opening and closing bank balances, deposits made to the account, refunds, and cash withdrawals is included. In addition, fines levied by your bank as well as declined or canceled payments will appear on your statements.
Differences between the two records could be the result of Deposits in transit: The firm may have received cash or cheques, but the bank may not have yet recorded them. Outstanding checks are ones that have been issued but have not yet been processed. Bank service fees: Banks frequently deduct service fees.
Thus, the ideal options are B, C, D, and F.
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Selected data for two subsidiaries of Dunn Corp. taken from December 31, year 1 preclosing trial balances are as follows:Banks Co. debit Lamm Co. creditShipments to Banks $ -- $150,000Shipments from Lamm 200,000 --Intercompany inventory profit on total shipments -- 50,000Additional data relating to the December 31, year 1 inventory are as follows:Inventory acquired from outside parties $175,000 $250,000Inventory acquired from Lamm 60,000 --At December 31, year 1, the inventory reported on the combined balance sheet of the two subsidiaries should beA. $425,000B. $435,000C. $470,000D. $485,000
Answers
The correct inventory amount is $470,000 [$175,000 + $250,000 + ($60,000 × 75%).
The Inventory Amount is the value of the Inventory as of the Effective Time (measured at the lower of cost or market value).
150/200 = 75%
Therefore, the original cost is 75% of Banks' carrying amount.
Therefore, the correct inventory amount is $470,000 [$175,000 + $250,000 + ($60,000 × 75%).
Inventory includes both raw materials used to manufacture goods and finished goods for sale. On a company's balance sheet, it is classified as a current asset.
Raw materials, work-in-progress, and finished goods are the three types of inventory. The first-in, first-out method, the last-in, first-out method, and the weighted average method are all used to value inventory. Inventory management enables businesses to reduce inventory costs by producing or receiving goods on an as-needed basis.
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An example of ____________________ rights includes not having multiple teams in the same city (based on population). For example, two Boston/MA teams would not both be allowed in the NBA based on the size of the market.
Answers
An example of territorial exclusivity rights includes not having multiple teams in the same city (based on population). For example, two Boston/MA teams would not both be allowed in the NBA based on the size of the market.
Territorial exclusivity rights refer to the exclusive rights granted to a particular entity or organization to operate within a specific geographic territory or market. These rights are commonly observed in sports leagues and other industries where the market size and population are taken into consideration to maintain a fair and competitive environment.
In the given example, the concept of territorial exclusivity is applied to professional sports teams. The NBA (National Basketball Association), for instance, has established rules and regulations that prevent multiple teams from operating in the same city or market, especially when it comes to large cities with a significant population base.
This practice ensures that each team has a designated market and fan base, allowing them to capture a sufficient audience and generate revenue. It also helps prevent market saturation and excessive competition within a specific geographic area, which could negatively impact the profitability and viability of individual teams.
By enforcing territorial exclusivity rights, leagues can maintain a balanced distribution of teams across different cities and markets, promoting fair competition and maximizing the reach and profitability of each franchise. It also helps to preserve the economic stability of the teams and foster fan loyalty within specific regions.
It is important to note that territorial exclusivity rights may vary across different leagues and industries, and the specific criteria for determining market size and boundaries may differ. However, the underlying principle remains the same: ensuring that each team has an exclusive market territory to operate within, avoiding overlapping or duplicative teams in the same city or area based on population.
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Jannah is reviewing a report that a new marketing manager put together after assessing her small business. If Jannah wants to learn how familiar a customer market is with her company’s products or services, what section of the marketing report should she review?
A.
Financial
B.
Quality control
C.
Brand recognition
D.
Profit margins
Answers
True or False : cost-volume-profit analysis cannot be used when a firm produces and sells more than one product.
Answers
Cost-volume-profit analysis cannot be used when a firm produces and sells more than one product—False.
A cost accounting technique called cost-volume-profit (CVP) analysis examines how different costs and volume levels affect operational profit. The breakeven point for various sales volumes and cost structures is sought for by the cost-volume-profit analysis, also known as the “breakeven analysis,” which can be helpful for managers making immediate business choices. Cost-volume-profit analysis makes a number of presumptions, among them the constancy of the sales price and the fixed and variable expenses per unit. For the price, cost, and other variables, a cost-volume-profit analysis uses a number of equations, which it then shows on an economic graph.
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Brenda wants to reduce mass media imc and to increase the use of personalized marketing communication messages. To achieve this goal, brenda will likely increase her use of.
Answers
The correct answer is Direct Marketing.
Brenda wants to reduce her mass media imc and to increase the use of personalized marketing communication messages. To achieve this goal, Brenda will likely increase her use of Direct Marketing.
What do you know about Direct Marketing? It is a form of direct communication with the selected customer, organization, or other firms. This form of marketing may be intrusive and annoying for a lot of people. The response rate is also quite low for direct marketing. We usually need to promote our products or services with this kind of marketing. It helps you in building a direct bond or direct relationship with new customers. It can also help in understanding the appeal of the product.To learn more about marketing visit: https://brainly.com/question/14201420?
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3. Integrated Potato Chips does not pay a dividend. Its current stock price is $150 and there is an equal probability that the return over the coming year will be -10%, +20%, or +50%. A) What is the expected price at year-end?
Answers
Integrated Potato chips expected price at year-end will be around $180.
What is the expected price?An expected price level, also known as anticipated price level, is the rate or price that products and services might be expected to attain given a specific set of economic conditions. This kind of figure is typically predicted by economists or even business owners as a way to get a sense of what will happen in a particular market should certain circumstances take place.
What does stock price mean?The price at which a share of stock is currently trading on the market is referred to as the stock price. When shares of a publicly traded firm are issued, their value is assigned a price that, ideally, represents the worth of the company itself.
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When preparing a business message, you should make your writing audience oriented. Audience oriented means a. attempting to get your audience to believe and accept your message. b. writing to solve a problem or convey information. c. presenting ideas clearly but concisely. d. concentrating on looking at the message from the receiver's perspective.
Answers
Answer:
D. Concentrating on looking at the message from the receiver's perspective.
Explanation:
When writing a business message, it is important to ensure that the perspective of the receiver is considered. There are two sides to a message; the speaker and the receiver. By making a business writtings audience oriented, it means that thoughts of the receiver or audience is considered alongside the message.
Although other skills such as; present ideal clearly but concise, attempt to get your audience to believe and accept your message, write to solve a problem or convey information are essential qualities of business writtings, yet do not point to audience oriented message.
If the fraction defective is 0.176, what is the upper control limit for the P-chart using P and S (assume the sample average = 12 and z = 3)?
0.506
0.176
0.253
0.491
Answers
The upper control limit for the P-chart using P and S is 0.253 to calculate the upper control limit (UCL) for the P-chart, you need to add three standard deviations to the sample average.
Given that the fraction defective is 0.176 and the sample average is 12, you can calculate the standard deviation (S) using the formula S = sqrt(p*(1-p)/n), where p is the fraction defective and n is the sample size. With z = 3 (corresponding to the number of standard deviations), you can calculate UCL = p + (3 * S) = 0.176 + (3 * S). Plugging in the values and solving, you get UCL = 0.253.
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104. Training objectives are necessary to give both the trainer and the trainee goals that can be used to evaluate program success. True False
Answers
Training objectives are necessary to give both the trainer and the trainee goals that can be used to evaluate program success is True.
Training objectives provide a clear understanding of what the training program intends to accomplish and what trainees are expected to achieve. These objectives serve as goals for both the trainer and trainees, and can be used to evaluate the success of the program.
Training objectives are necessary to give both the trainer and the trainee goals that can be used to evaluate program success. These objectives provide clear expectations and outcomes for the training process, allowing for an accurate assessment of the program's effectiveness.
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At work, Mario was trying to show Jenessa the new procedure for stocking the shelves. Jenessa kept working as he explained and quickly became frustrated because Mario kept telling her she was doing it wrong. What could Jenessa have done first to be a better active listener?
She could have read the employee memo that explained the new procedure.
She could have asked clarifying questions to make sure she understood.
She could have stopped what she was doing to give Mario her full attention.
She could have restated what he said in her own words.
Answers
Answer:
She could have stopped what she was doing to give Mario her full attention.
Answer:
C, she could have stopped what she was doing to give Mario her full attention.
Explanation:
Good luck on your test:)
how is join stock company different from other organizations?
Answers
A joint stock company is an particular legal entity, apart from the persons involved. It can own support and can because it is an entity it can sue or can be sued. Whereas a federation or a sole proprietor, it has no such legal reality apart from the person involved in it.
Why joint stock company is more relevant than other?
As compared to sole proprietorships and partnership firm, a joint stock company can earn huge amount of accounts. It encourages the mobilization of savings of millions for the productive purposes. Since its capital is separated into share of small value, even an ordinary investor can contribute to its capital.
What are the factors of joint stock companies?The Companies Act 1956 defines a joint stock company as an insincere person created by law, having separate legal entity from its owner with an unchanging sequence and a common seal. Shareholders of Joint Stock Company have limited liability i.e liability limited by warranty or shares.
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how do i spell chicken strips?
Answers
Answer:
chicken strips
Explanation:
yes
Men have often been listened to because they tend to be _____________. a. physically larger than women b. faster than women in races c. awake earlier than women d. louder than women Please select the best answer from the choices provided A B C D
Answers
The reason why men are often listened to is because they tend to be a. physically larger than women.
Why are men often more dominant?Men are physically larger and usually stronger than women thanks to biological changes at teenagehood.
As a result, they usually command more attention when they speak out of fear that they might resort to violence if they don't get their way. This makes them more dominant and likely to be listened to.
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Answer: The correct answer is A. physically larger than women
Explanation: Confirmed correct
Cynthia has been asked by her superior to calculate the total shareholder’s equity. Which balance will she add to the opening equity to find the closing balance of the shareholder’s equity?
A.
retained earnings
B.
salaries payable
C.
supplies
D.
inventory
E.
cash at bank
Answers
Answer:
A. retained earnings
Explanation:
Retained earnings are part of a company's profits that have not been distributed to shareholders as dividends. It means that retained earnings belong to shareholders only that they have not been shared with them. Businesses use retained earnings to further investments into the business.
Retained earnings are added to the opening balance of equity to determine the balance of shareholders' equity. They are added because they belong to shareholders.
Fixed costs are $3,000,000 and the unit contribution margin is $150. What is the break-even point? A) $7,500,000 B) $20,000,000 C) 750 units D) 20,000 units
Answers
The break-even point is 20,000 units. It is the point at which the company is neither making a profit nor incurring a loss
Break-even point is the point where a company's total revenue equals its total expenses. . To calculate the break-even point, you need to know the fixed costs, the unit contribution margin, and the unit sales price.
Fixed costs are expenses that remain constant regardless of the level of production or sales volume. Unit contribution margin is the amount by which the unit selling price exceeds the variable cost per unit.
The formula for calculating the break-even point in units is:
Break-even point (units) = Fixed costs ÷ Unit contribution margin
In this case, the fixed costs are $3,000,000 and the unit contribution margin is $150.
Break-even point (units) = $3,000,000 ÷ $150 = 20,000 units
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What was the civil rights organization made up of college and high school students that were known for their non-violent sit-ins, freedom rides, and desegregating lunch counters/restaurants?
Answers
The civil rights organization that you are referring to is the Student Nonviolent Coordinating Committee (SNCC).
What is Student Nonviolent Coordinating Committee (SNCC)?The Student Nonviolent Coordinating Committee (SNCC) was a civil rights organization in the United States that was active from 1960 to 1968. It was made up of college and high school students who worked to end racial segregation and discrimination through non-violent means, such as sit-ins, freedom rides, and desegregating lunch counters and restaurants. SNCC played a key role in the Civil Rights Movement, and was known for its grassroots organizing, voter registration campaigns, and its role in the Freedom Summer of 1964. It was one of the major organizations of the movement alongside the Southern Christian Leadership Conference (SCLC) and the Congress of Racial Equality (CORE).
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PLEASE HELP QUICKLY: (FIRST ANSWER GETS BRAINLIEST) PERSONAL & FAMILY FINANCE
Ivywood Country Club recently hired Spencer to find additional resources, make major decisions involving membership, and develop ideas for new swag to be sold in the pro shop. What unique skill did the club MOST likely need when they hired Spencer?
capital capacity
labor talent
entrepreneurial ability
Answers
Answer:
entrepreneurial ability
Explanation:
Entrepreneurial ability is the capacity to understand every aspect of a business. It entails combining a range of technical, management, and personal skills. Entrepreneurial ability incorporates creativity, ambition, determination, teamwork, risk management, and a sense of responsibility.
Spencer must have Entrepreneurial abilities; that's why the club hired him. The club believes that his creativity and determination will be useful in finding additional resources. Spencer can recognize, attract, and retain talent. Entrepreneurial abilities involve taking over a business that already exists and making it better.
Which is an economic system?
a.
monarchy
c.
dictatorship
b.
democracy
d.
market
Answers
Answer:
market!!!
Explanation:
Market is an economic system. A market economy is an economic system in which supply and demand determine how goods and services are produced.
What is economic system?An economic system is a method for communities or governments to organize and distribute resources, services, and goods throughout a region or country. As a result, a social system is a form of economic system.
Thus, Option, D market is correct.
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1. Buyers, sellers, and producers all have someone else they are competing with for economic benefits. This is known as:
O competition
O monopoly
O collusid
O cartels
Answers
Answer:monopoly
Explanation:
Grayson really wants to get an a on his upcoming math test but he hates studying. He decides to set a goal for himself to study for 20 minutes every night this week and preparation for the quiz Friday.What kind of goal Grayson set for himself?
Answers
Answer: short term goal
Explanation:
A short-term goal is a goal that an economic agent such as an individual or a fitm wants to achieve or accomplish soon. Short term goals are goal that one wants to achieve maybe today, in a week, in a month or even probably a year.
Since Grayson really wants to get an a on his upcoming math which is coming soon, the goal that he sets to study for twenty minutes every night is referred to as a short term goal.
as an example of price discrimination, airlines charge higher fares to business travelers whose demand for travel is and offer lower, more restricted fares to vacationers and others with more demand. t/f
Answers
The statement - airlines charge higher fares to business travelers whose demand for travel is and offer lower, more restricted fares to vacationers and others with more demand is true for price discrimination.
What is price discrimination?The seller's opinion that certain consumer groups can be asked to pay more or less depending on their demographics or how much they value the goods or service in question serves as the foundation for price discrimination.
When the profit from separating the markets exceeds the profit from preserving the combined markets, price discrimination is most advantageous.
Whether price discrimination is effective and how long different groups are ready to pay different prices for the same commodity depends on the relative elasticities of demand in the submarkets.
Consumers who purchase in a highly inelastic submarket do so at a higher cost than those who purchase in a similarly elastic submarket.
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Criteria
Total
LIFO Calculation
1.5%
FIFO Calculation
1.5%
Average Cost Calculation
1.5%
Inventory Question
.5%
Total
5%
You work for Global Tracking Inc. a company that sells a real-time tracking bracelet that tracks patients and nurses in different healthcare environments using GPS technology. designed for individuals who wish to monitor others’ whereabouts. There has been an increase in demand for the product has spiked during the current fiscal period, while supply is limited, causing the selling price to escalate rapidly. Note: For simplicity of demonstration, beginning inventory cost is assumed to be $21 per unit for all cost assumption methods.
The following is a chart of the inventory purchases in the last year
Assume that 300 units were sold in the fiscal year. Calculate the Cost of Goods Sold for the fiscal year for Global Tracking Inc. under the LIFO, FIFO and Average Cost inventory valuation methods. If the company wants to have a higher balance in the Inventory Account on the Balance Sheet which method should it use?
Answers
To calculate the Cost of Goods Sold (COGS) for the fiscal year under the LIFO, FIFO, and Average Cost inventory valuation methods, we need to consider the inventory purchases and the number of units sold.
Given:
Beginning inventory cost per unit: $21
Inventory purchases in the last year:
- Date 1: 200 units at $23 per unit
- Date 2: 400 units at $25 per unit
- Date 3: 500 units at $28 per unit
Number of units sold in the fiscal year: 300
1. LIFO Calculation:
Under the LIFO (Last-In, First-Out) method, the cost of the most recent inventory purchases is matched with the units sold first.
LIFO assumes that the most recent inventory is sold first, so the cost of the last purchase is used first.
COGS = Number of units sold * Cost of the most recent inventory purchase
COGS = 300 units * $28 per unit (the cost of the last purchase)
COGS = $8,400
2. FIFO Calculation:
Under the FIFO (First-In, First-Out) method, the cost of the earliest inventory purchases is matched with the units sold first.
FIFO assumes that the earliest inventory is sold first, so the cost of the first purchase is used first.
COGS = Number of units sold * Cost of the first inventory purchase
COGS = 300 units * $23 per unit (the cost of the first purchase)
COGS = $6,900
3. Average Cost Calculation:
Under the Average Cost method, the cost of all inventory purchases is averaged and used to determine the cost per unit.
Total cost of inventory purchases = (200 units * $23 per unit) + (400 units * $25 per unit) + (500 units * $28 per unit)
Total cost of inventory purchases = $4,600 + $10,000 + $14,000
Total cost of inventory purchases = $28,600
Average cost per unit = Total cost of inventory purchases / Total number of units purchased
Average cost per unit = $28,600 / (200 units + 400 units + 500 units)
Average cost per unit = $28,600 / 1,100 units
Average cost per unit ≈ $26
COGS = Number of units sold * Average cost per unit
COGS = 300 units * $26 per unit
COGS = $7,800
If the company wants to have a higher balance in the Inventory Account on the Balance Sheet, it should use the LIFO method. LIFO assumes that the most recent inventory is sold first, which means the older inventory remains in the inventory account at the lower cost, thereby keeping the value of the remaining inventory higher on the balance sheet.
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