Why would a merchandising company need good internal controls related to its inventory? List three of the key elements of an internal control system that would apply to inventory, and explain how each of them does relate to inventory.
What will be an ideal response?
A merchandising company needs good internal controls related to its inventory for several reasons, such as inventory may be the largest asset on the balance sheet in dollar amount and thus a tempting target for theft; some inventory is small in size and valuable and thus subject to theft or shoplifting; and Cost of Goods Sold may be the largest expense on the income statement. As a result, theft or fraud related to inventory can have a significant impact on the company's reported performance.
Most of the key features of internal control systems apply to inventory. For example:
1) Segregation of duties - Employees who sell inventory should not count it when a physical count of the inventory is needed. Also, employees who handle inventory should not make journal entries related to inventory.
2) Quality of employees - A company should hire motivated employees with good educational background and work experience. The company should also provide training to employees so that they understand policies related to inventory.
3) Authority and responsibility - Employees who sell inventory (or who handle inventory in a warehouse) should understand their responsibility and the limits of their authority.
4) Physical controls - Physical controls (such as locked storerooms) should be used as appropriate to protect the company's inventory.
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Answer the following statements true (T) or false (F)
1.. Because of the vastness of the virtual landscape, interacting online may be affecting our perceptual focus by making it much easier for us to concentrate on one thing for a sustained period of time. 2.At times, we may discriminate against an individual. When this occurs, we exhibit indiscrimination. 3.Stereotyping leads us to oversimplify, generalize, and grossly exaggerate our observations. 4.We develop schemata and scripts based on both real and vicarious experiences. 5.Tom was impressed with the speech Alicia gave in his class last month. As he got to observe her more and got to know to know here, he began to perceive additional things about Alicia has time has gone forward. This is an example of the horn effect.
Manufacturers can obtain greater control over the selling process by using a sales agency
Indicate whether the statement is true or false
A(n)__________strategy is not possible when the brand name has a negative or vulgar connotation in the local language
Fill in the blanks with correct word.
Swola Company reports the following annual cost data for its single product.Normal production level 75,000unitsDirect materials$1.25per unitDirect labor$2.50per unitVariable overhead$3.75per unitFixed overhead$300,000in totalThis product is normally sold for $25 per unit. If Swola increases its production to 200,000 units, while sales remain at the current 75,000 unit level, by how much would the company's income increase or decrease under variable costing?
A. $187,500 decrease. B. $112,500 increase. C. $187,500 increase. D. $112,500 decrease. E. There will be no change in income.