Inventory Flashcards
1
Q
Perpetual inventory
A
Average cost is computed at time of sale
Total cost / total units just before sale = avg cost
COGs = avg cost x units sold
2
Q
Periodic inventory
A
Average cost computed at end of period
Total beginning inventory & all purchase (units & costs)
Total cost / available units for sale = avg unit cost
COGs = avg unit cost x units sold
3
Q
Conventional retail inventory method
A
Retail inventory + Net Markups - Net Markdowns = Sales price of good available for sale - Sales at retail = Ending inventory in retail dollars
Convert to cost dollars = ending inventory in retail dollars x cost to detail % (inventory cost / retail inventory + net markups)
