Discuss the Importance of Keeping an Accurate Record of ADR

question 31

Essay

Discuss the importance of keeping an accurate record of ADR and ROP.In what areas is this information used in the strategic planning of the hotel's operations?

Recognize the importance of the lower of cost or market rule in valuing inventory.

Distinguish between inventory owned by a company and inventory held on consignment.

Understand the significance and applications of various inventory costing methods (FIFO, LIFO, Weighted Average, Specific Identification).

Identify the circumstances under which estimated inventory costing methods are used.

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Definitions:

Excess Supply

A market condition where the quantity of a product offered for sale by producers exceeds the quantity demanded by consumers at a given price.

Price Floor

A government-imposed minimum price charged for a commodity, below which it cannot legally be sold, typically intended to protect producers.

Retailers

Businesses that sell goods directly to consumers.

Price Floor

A government-imposed minimum price set above the equilibrium price, intended to ensure fair conditions for producers.