require collateral. The Company maintains reserves for potential losses, and such losses have historically been within management’s expectations. In addition, the Company invests excess cash in interest bearing accounts, money market mutual funds and funds which invest in obligations of the U.S. Treasury and repurchase agreements backed by U.S. Treasury obligations. Changes in the financial markets and interest rates could affect the interest earned on short-term investments. Basic earnings per share are computed by dividing net income by the weighted average number of shares of common stock outstanding during the year. Diluted earnings per common share are computed considering the dilutive effect of stock options and awards using the treasury stock method. In May 2014, the FASB issued ASU 2014-09 “Revenue from Contracts with Customers (Topic 606).” The amendment applies a new five-step revenue recognition model to be used in recognizing revenues associated with customer contracts. The amendment requires disclosure sufficient to enable readers of financial statements to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers, including qualitative and quantitative disclosures, significant judgments and changes in judgments, and assets recognized from the costs to obtain or fulfill the contract. The standard is effective for fiscal years beginning after December 15, 2016, including interim periods within that reporting period. The Company is currently evaluating the new guidance to determine the impact on its consolidated financial statements. Inventories consist of the following: Summary of allowance for excess and slow-moving inventory: 55 In thousands Balance at December 31, 2011 ...................... $26,228 Charges to costs and expenses ................... 4,651 Write-offs of inventory ........................ (453) Balance at December 31, 2012 ...................... 30,426 Charges to costs and expenses ................... 3,554 Write-offs of inventory ........................ (764) Balance at December 31, 2013 ...................... 33,216 Charges to costs and expenses ................... 3,951 Write-offs of inventory ........................ (2,560) Balance at December 31, 2014 ...................... $34,607 December 31, 2014 2013 (In thousands) Raw materials and supplies ........................ $107,357 $ 85,670 Work in progress ................................ 112,514 119,929 Finished goods .................................. 207,295 195,971 427,166 401,570 Less: allowance for obsolete and excess inventory ...... (34,607) (33,216) Total inventory ................................. $392,559 $368,354 Earnings Per Share 3. New Accounting Standards 4. Inventories