ACC 557 Week 4 DQ2
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Date Created: 11/11/15
ACC 557 Week 4 DQ2 quotInventoriesquot Please respond to the following Imagine you are accountable for a franchise fastfood restaurant Evaluate the best method of inventory costing and make a recommendation to the company s leaders about why it is best suited for your franchise fastfood restaurant to reduce the possibility of employee theft of product or other shrinkage concerns Inventory control requires constant attention Propose a set of guidelines that re ect the necessary monitoring controls for three distinct types of business e g a shoe retailer a physician s office and a food vending truck to minimize loss and waste Indicate how each control will minimize risk of inventory loss There are three kinds of valuation methods available first in first out FIFO last in first out LIFO and average cost Weygandt Kimmel ampKieso 2012 Restaurants usually use justin time inventory methods to because they make the food just in time for the customers to eat it Based on that I would recommend LIFO A restaurant does not want to make more food than it will sell because then they are producing waste They also want to only serve the freshest food As a shoe retailer I would avoid excess inventory costs by ensuring that we have turnover of our goods through cost control processes such as sales buy one get one free etc As a physician s office I would be concerned with my inventory of supplies expiration dates and the control of biological hazardous goods I would monitor supplies so that I have what is needed but not have an excess that will have to be destroyed ultimately costing me more money A food vending truck is harder I think because of the inventory consisting of perishable goods that have a high turnover rate With all these types of business I would set guidelines that outline the schedule of manual inventory as well as analysis of the data This needs to be perpetual If it is automated the guidelines would be that this needs to be checked once a month for the shoe shop once a week for the doctor s office and daily for the food truck Weygandt J Kimmel P ampKieso D 2012Financial accounting 8th ed Hoboken NJ John Wiley amp Sons Inc
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