You Are the New Controller at Ralston Industries and You

question 159

Essay

You are the new controller at Ralston Industries and you have noticed that the company seems to carry a lot of inventory, both in direct materials and in finished goods.At a recent management meeting, you raised this observation.The managers agreed with your observation but stated that it was company policy to carry large inventories.Required:
Provide three reasons these managers might offer in support of carrying large inventories?

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Definitions:

Adrenal Cortex

The outer part of the adrenal gland that produces steroid hormones which regulate carbohydrate and fat metabolism and mineralocorticoid hormones that regulate salt and water balance in the body.

Growth Hormone

A hormone that stimulates growth, cell reproduction, and regeneration in humans and other animals.

Long Bones

Bones that are longer than they are wide, mainly found in the arms and legs, playing a crucial role in movement.

Hyperthyroidism

A condition where the thyroid gland produces an excessive amount of thyroid hormones, leading to a rapid metabolism and other health issues.