Company: Epsilon Manufacturing Solutions

Managerial Accounting Process: Inventory Management

Product	Beginning Inventory (units)	Purchases (units)	Sales (units)	Ending Inventory (units)	Cost per Unit ($)
Product A	8,000	6,000	7,000	7,000	35
Product B	5,000	4,500	4,000	5,500	40

Requirements:

1. Inventory Valuation:
   • Calculate the cost of goods sold (COGS) for Product A and Product B using the weighted average cost method.

1. Inventory Turnover Ratio:
   • Compute the inventory turnover ratio for both Product A and Product B and explain its significance in evaluating inventory management efficiency.

1. Just-in-Time Inventory System:
   • Discuss the advantages and disadvantages of implementing a just-in-time inventory system for Epsilon Manufacturing Solutions based on the inventory data provided.

1. ABC Analysis:
   • Perform an ABC analysis to classify Product A and Product B based on their annual sales revenue and recommend appropriate inventory management strategies for each category.

1. Inventory Optimization:

Recommend two strategies Epsilon Manufacturing Solutions could adopt to optimize its inventory levels and reduce carrying costs based on the inventory turnover ratio analysis.