Outdoors Ltd manufactures garden furniture and sells them through a range of wholesalers. The management of ABC ensures of sufficient level of trade, by keeping a tight control on its inventory. The management of the company has asked you to produce a report on the following:
A) Outdoors currently applies a “variable stock valuation method” and is considering changing it to the “full-absorption” or “activity-based method”. As part of this process, you are required to explain and differentiate the three quoted methods in the calculation of the total inventory. (750 words)
Sample Solution
