E6-12 Manufacturing inventories Qualcomm Incorporated (QCOM) is a leading developer and manufacturer of digital wireless telecommunications products and services. Qualcomm reported the following inventories (in millions) in the notes to recent financial statements: Raw materials Work in process Finished goods 941 $1,492 a. Why does Qualcomm report three different inventories? b. What costs are included in each of the three inventory accounts? E6-13 Film costs of DreamWorks DreamWorks Animation SKG Inc. (DWA) shows "film costs" as an asset on its balance sheet. In the notes to its financial statements, the following disclosure was made: December 31, Film Costs (in thousands) Year 2 Year 1 In release: Animated feature films $392,186 $285,238 Television specials 67,803 58,631 In production: Animated feature films 206,240 474,609 Television specials 62,426 15,332 (Continued on next page) 264 Chapter 6 Receivables and Inventories 86-13 conto In development: Feature films $88,200 $75,498 Television series and specials 1,118 1,500 Product Inventory 9,917 32,678 Total film costs $827,890 $943.486 a. Interpret the film cost asset categories b. How are these classifications similar or dissimilar to the inventory classifications used in a manufacturing firm? Obj. 6 b. $19,080 E6-14 Inventory by three methods The units of an item available for sale during the year were as follows: Jan. 1 Inventory 27 units at $400 Feb. 19 Purchase 54 units at $460 June 8 Purchase 63 units at $520 Oct. Purchase 56 units at $550 There are 45 units of the item in the physical Inventory at December 31. Determine the cost of ending Inventory using (a) the first-in, first-out method, (b) the last-in, first-out method, and (c) the weighted average cost method