Questions for a carpentry business. Building houses and such. also selling merchidise that says the same of the company.

1. Which inventory costing methods do you feel would be the best for the type of merchandise you are selling? Why?
2. Use your answer from question #1 and explain the effects it will have on your company's financial statements.
3. What does Inventory Turnover and Days' Sales of Inventory measure? For your specific product, what types of answers would you like to see for these two ratios?
4. With your specific product, would you expect to use a periodic or perpetual inventory costing system? Why?
5. Identify all the items that make up your inventory.
6. Explain all the costs associated with acquiring your merchandise inventory.
7. Explain how the Lower of Cost or Market Rule (LCM) would apply to your specific business.
8. How does The Consistency Principle apply to your inventory costing methods?
9. Which inventory costing method is ideal for tax purposes? Why?
10. Why might you need to estimate the value of your inventory? Explain one way to do it.