The Cost of Garmin Corp

question 38

Essay

The cost of Garmin Corp.'s inventory at the end of the year was $85,000; however, due to obsolescence, the cost to replace the inventory was only $65,000. Identify the effects of this transaction on the accounting equation and income statement accounts at the end of the year.

---

Definitions:

Control Limits

Pre-determined lines on a statistical process control chart that mark the boundaries of allowable variation.

Standard Deviation

A gauge of the spread or scatter of numbers in a collection.

Lower Control Limit

The lower control limit is the statistical lower boundary on a control chart, helping to identify process variation or signal the need for corrective action if data points fall beyond this limit.

Upper Control Limit

The highest value on a control chart that signals the process is in control and within set parameters.