When Physical Inventory Value Exceeds Book Inventory Value a Retailer

question 23

Multiple Choice

When physical inventory value exceeds book inventory value a retailer is said to have:

• A) excess profits.
• B) shortages.
• C) overages.
• D) markups.
• E) inventory gains.

---

Definitions:

Conversion Costs

Costs associated with converting raw materials into finished products, including labor and manufacturing overhead.

Enameling Department

A specific division within a manufacturing facility focused on the process of applying a vitreous enamel coating to products.

Conversion Costs

The costs involved in converting raw materials into finished products, including labor and overhead.

First-In, First-Out

An inventory valuation method where the goods purchased or produced first are sold or used first.