complete your responses to the three scenarios and discussion prompt. Show step-by-step calculations, starting with the application of a formula, to arrive at the answer.
Scenario 1
Determine the total merchandise handled based upon the following factors.
opening inventory for the month $44,700
total purchases for the month $13,350
merchandise returned to vendor $12,600
merchandise transferred out $7,500
merchandise transferred in $3,850
additional mark up impact $1,770
Scenario 2
Calculate the closing book inventory and total deductions for a retail business based upon the following information.
total merchandise handled $64,323
gross sales for the month $36,555
customer return and allowances $5,750
merchandise markdowns $11,960
employee discounts $1,900
cancelled markdowns $4,590
Scenario 3
Find the average cost of inventory and the gross margin return on inventory (GMROI).
January BOM Stock $199,660
Feburary BOM Stock $236,476
March BOM Stock $312,118
April BOM Stock $444,002
May BOM Stock $500,077
June BOM Stock $260,888
June EOM Stock $243,651
Gross Margin $1,365,780
Discussion Question
What are your recommendations regarding the frequency with which physical inventory is taken at a store like South Beach Boutique? Should it be taken more frequently? Less frequently? Should there be no change in the frequency with which physical inventory is taken? What are the advantages and consequences associated with more frequent physical inventory counts? Provide a justification for your recommendation.