University Store Case

FIFO or LIFO In the case, the university lineage provided skunk of goods and services with various be. They frequently have their costs, selling prices and discounted prices changed. This process would endure a cosmic amount of melt down since the investment company kept large number of books. Although the chime in has planned to record data by establishing a bracing softw atomic number 18 system, they employ the retail method easing and simplifying record tracking. Comparing the FIFO or the LIFO method, the retail method would be the better to value strain with two major cases. One reason is that severance would accept the report under the retail method.While applying the FIFO or LIFO method, the interpose would calculate historical percentages to estimate ending armory cost. However, they would use the current cost-to-retail ratios, which are to a greater extent acceptable and reliable for GAP financial report. The other is that the memory could be easy to record en try. The come in could record numbers including the total cost and purchase retail value, costs and retail prices, and total gross revenue in a period. Also, the Store aroundtimes marks up the original sale prices, which should be marked pour down before calculating ending Inventory.By acquiring same Information, cost-to-retail percentage in FIFO or LIFO method are able to be calculated with omitting startle inventory or only using beginning inventory respectively. Causes and Procedures for Inventory Obsolescence The Store realized that they needed to consider the inventory obsolescence problem. They have found the large pot of inactive books, which could re-adopt in the adjoining semester or could not be leaded to publishers. The major pull ins of this problem could be divide Into four parts. Firstly. E overturn appraise of returns manager was significantly amply in the recent years, causing difficulties to clear the unneeded textbooks before the new edition published. If the textbooks became obsolete and unable to be returned to publishers, they would be stored in the bookstore or the warehouse, making losses in the financial report. The first mathematical operation to improve the problem could be to find the reasons of high turnover rate like large workload, high-pressure environment or unexpected salary. Then, the Store should address the problem with diverse strategies depending on the reasons. Secondly, the Store distributed little employees to work on arranging the inactive textbooks since total employees were insufficient. This problem caused the obsolete books would stored progressively making financial losses. To solve the problem, the Store could recruit more employees in order to fabricate more attention on the Inactive textbooks If the Store has ability to hire more. Moreover, the Store tried to actively pay seat the used books In order to demoralise costs. TLS caused the Store would possibly come up the unneeded books, which p rofessors would stop using next semester.These textbooks would be unable to return to the publishers and would become losses for financial reporting. The procedure solving the problem could be firstly asking professors or teachers whether the used textbooks would be continually used in the emerging. Next, the Store would be able to decide which book should pay back depending on their requirements and recommendations. Last but not least, the would lower sales of textbooks recently. If the Store obtained the same number of a specific textbook with change magnitude usage, the books would become inactive causing financial losses.In order to solve the problem, the Store could establish a survey about the decreasing demands or assertable cancellations of the books. After that, they could estimate the future inventory of fewer books with low demands. Inventory Practices Cause Misstatement Risk of Inventory While calculating the inventory value, some practices would possibly increase the risk of misstatement. At first, errors would appear in put down different costs, selling prices and price changes in sale while organizing hundreds of products.The Store should arrange at least two employees to check the values are correct although they eve already faced the problem of insufficient employees, which would cause individual workload increases. Secondly, the part-time workers with insufficient training and frequent turnover rate would create calculating mistakes. Although heavy reliance of part-time employees could lower the operating cost, it would increase the risk of inventory misstatement. To detect this possible misstatement, the Store should hire more full-time employees or provide a model to monitor the process of switching different part-time employees.Also, the revisions of college extols were published more frequently, which increase the risk of inventory misstatement. The Store needs to obtain the culture about the time the revision would be published in the future and content comparison with old version. Likewise, the textbook demand is hard to run into or estimate since currently students are able to purchase cheaper from different sources like friends or online. The Store can provide some promotion or sale to attract the students. It can obtain small volume of inventory, and then decide to purchase more depending on the demand.