Homework Answers
Answer: D; lowest cost of goods sold, highest net income, and highest ending inventory.
During inflation, prices of materials will increase, under FIFO (First in first out) method, material purchased in the earlier period will be first used in production, which results in lower cost of goods sold.
lower cost of goods sold will result in lower total cost of the product, which will result in increase in profit.
Under FIFO method, material purchased in the later period are subject to inflation there by price of inventory is highest in the inflation.
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Question 17 (2 points) ✓ Saved During a period of inflation, firms using FIFO will have...
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5 Inventory and Prepaids (10 Points) Saved Mannisto Inc. uses the FIFO inventory cost flow assumption....
5 Inventory and Prepaids (10 Points) Saved Mannisto Inc. uses the FIFO inventory cost flow assumption. In a year of rising costs and prices, the firm reported net income of $222,805 and average assets of $1,497,010. If Mannisto had used the LIFO cost flow assumption in the same year, its cost of goods sold would have been $43,620 more than under FIFO, and its average assets would have been $40,580 less than under FIFO. Required: a. Calculate the firm's ROI...
QUESTION 4 8 points Save Answer Company A uses LIFO and Company B uses FIFO. Assume rising prices. In analyzing liquidity and profitability of the two firms, which of the following statements is true? Company B will have higher owners' equity. Company A will have lower cost of goods sold Company A will have higher liabilities. Company B will have lower income tax payments. It is impossible to say anything about the two firms since they use different inventory methods....
During a period of inflation, using — will approximate a company's current cost of ending inventory. O FIFO O both FIFO and the average cost formula the average cost formula the lower of cost and net realizable value
-17 Saved Compute cost of goods sold for the period using the following information. Finished goods inventory, beginning Work in process inventory, beginning Work in process inventory, ending Cost of goods manufactured Finished goods inventory, ending $378,000 85,000 78,300 967,000 334,000 Cost of Goods Sold is Computed as: Cost of goods sold
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Business School Problem 3 (25 points) Shamrock Inc. are Shamrock's purchases during Juy sells high-definition televisions and uses a perpetual inventory system. Shown below Purchase Date Unit purchased July 3 July 7 Unit cost 190 195 Total cost $1,710 $2,340 Total 32 $6,305 On July 20, Shamrock Inc. sold 15 units. The other 17 units remained in inventory at July 31 1. Compute the cost of goods sold relating to the sale on July 20 and the ending inventory July...
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5 Inventory and Prepaids (10 Points) Saved Mannisto Inc. uses the FIFO inventory cost flow assumption. In a year of rising costs and prices, the firm reported net income of $222,805 and average assets of $1,497,010. If Mannisto had used the LIFO cost flow assumption in the same year, its cost of goods sold would have been $43,620 more than under FIFO, and its average assets would have been $40,580 less than under FIFO. Required: a. Calculate the firm's ROI...
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