Which basic production strategy will build inventory and avoid the costs of excess capacity
No, billings in excess of costs are a current liability.
There is something called the Opportunity cost. The regular inventory check would help in minimization of the capital tied up in excess inventory and the opportunity cost can be minimized by that. So the biggest merit of that is to lay check on the maintenance and excess tied up capital to the inventory reserves.
calculate the average cost of placing one order
When you take an inventory and calculate the value, this value is compared to the last time an inventory was calculated. If the value of the inventory has increased (say by $100), then a journal entry reflecting a debit of $100 to Inventory account (an asset) and a credit to your Cost of Goods Account.
You would have to do a count of all the inventory. Have all the managers submit the information so you can determine the excess.
You can use ebay to sell excess inventory. Also craiglist or local wanted ads may have people looking to buy excess inventory.
Which basic production strategy will build inventory and avoid the costs of excess capacity
Difficulty with identifying and classifying excess items
With excess inventory, it is possible to return it back to the supplier for a fee. However, if a business still wants to attempt to make a profit, many businesses will put the inventory up for sale or clearance. This usually occurs at the end of a selling season when new inventory is coming in.
No, billings in excess of costs are a current liability.
There is something called the Opportunity cost. The regular inventory check would help in minimization of the capital tied up in excess inventory and the opportunity cost can be minimized by that. So the biggest merit of that is to lay check on the maintenance and excess tied up capital to the inventory reserves.
You calculate average change in inventory by dividing the turnover by how many times it has turned over. The number you get is the average.
This is a very simple calculation. Days to Sell Inventory(or Days in Inventory) = Average Inventory / Annual Cost of Goods Sold /365 Average Inventory = (Beginning Inventory + Ending Inventory) / 2 To calculate this ratio for a quarter instead of a year use the following variation: Days to Sell Inventory (or Days in Inventory) = Average Inventory / "Quarterly" Cost of Goods Sold /"90" Average Inventory = (Beginning Inventory + Ending Inventory) / 2
Generally inventory turnover period is calculated as: Sales/Inventory Also by, Cost of Goods Sold/ Average Inventory
Companies have several options when liquidating inventory. They can hold liquidation sales for the public. Or they can send their inventory to be auctioned by bulk.
Doing your mom