Question 3 1. Manufacturers report inventory in the form of raw materials, work-in-progress, and finished goods. For each category, discuss how an increase might be viewed as a positive or a negative indicator of future performance depending on the circumstances of the inventory built up. (3 marks) 2. Maxim Sdn Bhd purchases its merchandise at current market costs and resells the product at a reasonable promargin. Its inventory cost is constant throughout the current year. Data on the number of units in Inventory at the beginning of the year, and unit sales are shown below: Number of units in Inventory - Beginning of the year @ RM 10.00 per unit 5,000 Number of units purchased during the year @ RM 10.50 per unit Number of units sold during the year @ RM 11.00 per unit The beginning of the year balance sheet for Maxim Sdn Bhd reports the following: Inventory (5,000 units @ RM 10.00)........... RM 50,000 Total Equity... RM 50,000 5,000 5,000