Homework Answers
| 5. Produces the same cost of merchandise sold under both the periodic and the perpetual inventory system | FIFO |
| 6. Rarely used with a perpetual inventory system | Weighted average |
| 7. Produces results that are similar to the specific identification method | FIFO |
| 8. Widely used for tax purposes | LIFO |
| 9. Never results in either the highest or lowest possible net income | Weighted average |
| 10. Produces the highest gross profit when costs are decreasing | LIFO |
| 11. Produces the highest ending inventory when costs are increasing | FIFO |
| 12. Assigns the same value to all inventory units | Weighted average |
| 13. Prohibited under International Financial Reporting Standards (IFRS) | LIFO |
| 14. Does not follow the physical flow of goods in most cases | LIFO |
| 15. Cost of the latest purchases are assigned to ending inventory | FIFO |
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Match each description to the appropriate cost flow assumption (a-c). a. FIFO b. LIFO c. Weighted...
Never results in either the highest or lowest possible net income Rarely used with a perpetual...
Never results in either the highest or lowest possible net income Rarely used with a perpetual inventory system Cost of the latest purchases are assigned to ending inventory Widely used for tax purposes Does not follow the physical flow of goods in most cases LIFO Prohibited under International Financial Reporting Standards (IFRS) FIFO Produces the highest gross profit when costs are decreasing Weighted average Produces results that are similar to the specific identification method Assigns the same value to all...
Mannisto Inc. uses the FIFO inventory cost flow assumption. In a year of rising costs and...
Mannisto Inc. uses the FIFO inventory cost flow assumption. In a year of rising costs and prices, the firm reported net income of $1,500,000 and average assets of $10,000,000. If Mannisto had used the LIFO cost flow assumption in the same year, its cost of goods sold would have been $300,000 more than under FIFO , and its average assets would have been $300,000 less than under FIFO. A) Calculate the firm's ROI under each cost flow assumption (FIFO and...
If you were attempting to maximize your net income, which inventory cost flow assumption would you...
If you were attempting to maximize your net income, which inventory cost flow assumption would you choose? Why? What conditions must exist for this method to produce the highest net income? When perpetual inventory records are kept, the results under the FIFO and LIFO methods are the same as they would be in a periodic inventory system.” Do you agree? Explain.
Mannisto Inc. uses the FIFO inventory cost flow assumption. In a year of rising costs and...
Mannisto Inc. uses the FIFO inventory cost flow assumption. In a year of rising costs and prices, the firm reported net income of $217,775 and average assets of $1,463,010. If Mannisto had used the LIFO cost flow assumption in the same year, its cost of goods sold would have been $39,290 more than under FIFO, and its average assets would have been $42,760 less than under FIFO. Required: a. Calculate the firm's ROI under each cost flow assumption (FIFO and...
Mannisto Inc. uses the FIFO inventory cost flow assumption. In a year of rising costs and...
Mannisto Inc. uses the FIFO inventory cost flow assumption. In a year of rising costs and prices, the firm reported net income of $235,546 and average assets of $1,496,540. If Mannisto had used the LIFO cost flow assumption in the same year, its cost of goods sold would have been $48,370 more than under FIFO, and its average assets would have been $40,460 less than under FIFO. Required: a. Calculate the firm's ROI under each cost flow assumption (FIFO and...
Mannisto Inc. uses the FIFO inventory cost flow assumption. In a year of rising costs and...
Mannisto Inc. uses the FIFO inventory cost flow assumption. In a year of rising costs and prices, the firm reported net income of $227,936 and average assets of $1,410,000. If Mannisto had used the LIFO cost flow assumption in the same year, its cost of goods sold would have been $43,260 more than under FIFO, and its average assets would have been $43,930 less than under FIFO. Required: a. Calculate the firm's ROI under each cost flow assumption (FIFO and...
Mannisto Inc. uses the FIFO inventory cost flow assumption. In a year of rising costs and...
Mannisto Inc. uses the FIFO inventory cost flow assumption. In a year of rising costs and prices, the firm reported net income of $276,359 and average assets of $1,424,900. If Mannisto had used the LIFO cost flow assumption in the same year, its cost of goods sold would have been $34,440 more than under FIFO, and its average assets would have been $47,980 less than under FIFO. Required: a. Calculate the firm's Rol under each cost flow assumption (FIFO and...
Mannisto Inc. uses the FIFO inventory cost flow assumption. In a year of rising costs and...
Mannisto Inc. uses the FIFO inventory cost flow assumption. In a year of rising costs and prices, the firm reported net income of $256,538 and average assets of $1,535,130. If Mannisto had used the LIFO cost flow assumption in the same year, its cost of goods sold would have been $39,560 more than under FIFO, and its average assets would have been $30,920 less than under FIFO. Required: a. Calculate the firm's ROI under each cost flow assumption (FIFO and...
Mannisto Inc. uses the FIFO inventory cost flow assumption. In a year of rising costs and...
Mannisto Inc. uses the FIFO inventory cost flow assumption. In a year of rising costs and prices, the firm reported net income of $246,103 and average assets of $1,536,150. If Mannisto had used the LIFO cost flow assumption in the same year, its cost of goods sold would have been $31,650 more than under FIFO, and its average assets would have been $35,170 less than under FIFO. Required: a. Calculate the firm's ROI under each cost flow assumption (FIFO and...
Mannisto Inc. uses the FIFO Inventory cost flow assumption. In a year of rising costs and...
Mannisto Inc. uses the FIFO Inventory cost flow assumption. In a year of rising costs and prices, the firm reported net income of $281,376 and average assets of $1,552,240. If Mannisto had used the LIFO cost flow assumption in the same year, its cost of goods sold would have been $34,420 more than under FIFO, and its average assets would have been $35,810 less than under FIFO. Required: a. Calculate the firm's Rol under each cost flow assumption (FIFO and...
Never results in either the highest or lowest possible net income Rarely used with a perpetual inventory system Cost of the latest purchases are assigned to ending inventory Widely used for tax purposes Does not follow the physical flow of goods in most cases LIFO Prohibited under International Financial Reporting Standards (IFRS) FIFO Produces the highest gross profit when costs are decreasing Weighted average Produces results that are similar to the specific identification method Assigns the same value to all...
Mannisto Inc. uses the FIFO inventory cost flow assumption. In a year of rising costs and prices, the firm reported net income of $217,775 and average assets of $1,463,010. If Mannisto had used the LIFO cost flow assumption in the same year, its cost of goods sold would have been $39,290 more than under FIFO, and its average assets would have been $42,760 less than under FIFO. Required: a. Calculate the firm's ROI under each cost flow assumption (FIFO and...
Mannisto Inc. uses the FIFO inventory cost flow assumption. In a year of rising costs and prices, the firm reported net income of $235,546 and average assets of $1,496,540. If Mannisto had used the LIFO cost flow assumption in the same year, its cost of goods sold would have been $48,370 more than under FIFO, and its average assets would have been $40,460 less than under FIFO. Required: a. Calculate the firm's ROI under each cost flow assumption (FIFO and...
Mannisto Inc. uses the FIFO inventory cost flow assumption. In a year of rising costs and prices, the firm reported net income of $227,936 and average assets of $1,410,000. If Mannisto had used the LIFO cost flow assumption in the same year, its cost of goods sold would have been $43,260 more than under FIFO, and its average assets would have been $43,930 less than under FIFO. Required: a. Calculate the firm's ROI under each cost flow assumption (FIFO and...
Mannisto Inc. uses the FIFO inventory cost flow assumption. In a year of rising costs and prices, the firm reported net income of $276,359 and average assets of $1,424,900. If Mannisto had used the LIFO cost flow assumption in the same year, its cost of goods sold would have been $34,440 more than under FIFO, and its average assets would have been $47,980 less than under FIFO. Required: a. Calculate the firm's Rol under each cost flow assumption (FIFO and...
Mannisto Inc. uses the FIFO inventory cost flow assumption. In a year of rising costs and prices, the firm reported net income of $256,538 and average assets of $1,535,130. If Mannisto had used the LIFO cost flow assumption in the same year, its cost of goods sold would have been $39,560 more than under FIFO, and its average assets would have been $30,920 less than under FIFO. Required: a. Calculate the firm's ROI under each cost flow assumption (FIFO and...
Mannisto Inc. uses the FIFO inventory cost flow assumption. In a year of rising costs and prices, the firm reported net income of $246,103 and average assets of $1,536,150. If Mannisto had used the LIFO cost flow assumption in the same year, its cost of goods sold would have been $31,650 more than under FIFO, and its average assets would have been $35,170 less than under FIFO. Required: a. Calculate the firm's ROI under each cost flow assumption (FIFO and...
Mannisto Inc. uses the FIFO Inventory cost flow assumption. In a year of rising costs and prices, the firm reported net income of $281,376 and average assets of $1,552,240. If Mannisto had used the LIFO cost flow assumption in the same year, its cost of goods sold would have been $34,420 more than under FIFO, and its average assets would have been $35,810 less than under FIFO. Required: a. Calculate the firm's Rol under each cost flow assumption (FIFO and...
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