Section 1. Inventory - Based on Monster Beverage INC. 2016 annual report To answ

Question

Section 1. Inventory - Based on Monster Beverage INC. 2016 annual report

To answer the following questions refer to various parts of your Annual Report and the Notes to the Financial Statements. Hint: See page 977 of your text for an example response. Be sure to use complete sentences and site your source, such as the page number from your annual report or other reference material used to respond to the following questions.

a) What type inventory accounts would your company have?

b) For reported cost of goods sold and operating expenses. Which costs are period costs? Which costs are product costs?

c) List some examples of product costs for your company.

Annual Report

http://files.shareholder.com/downloads/HANS/6205268097x0x941157/6DFB50A9-0D18-4841-BE07-AF966ABFE9AF/Monster_Beverage_2016_Annual_Report.pdf

Explanation / Answer

A. The company have 2 inventory accounts, raw material and finished goods.

B. Period costs are : payroll costs, travel.cosys, professional services fee, termination payment made to the company's prior distributors, depreciation and other general administrative expenses.

Productcosts are : distribution expenses of products to warehouses and customers, sampling and in store demonstration costs, marketing and design expenses, cost of raw materials used, packaging expenses, inbound freight expenses, internal transfers.

c. Examples of product costs:

Cost of concentrates

Cost of beverages

Raw materials used in the manufacture

Co packing

Repacking

In bound internal freight

Internal transfers

Warehouse expenses.

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