FIFO stands for First In First Out and LIFO stands for Last In First Out.
Answer: LIFO produces more favorable cash flow because LIFO PRODUCES LOWER INCOME TAX EXPENSE.
During inflation, LIFO approach is adopted for tax benefits. With the rise in prices, LIFO produces higher cost of sold amounts of goods.
Answer:
Credit to Gain on Sale of Investments for $2,400
Answer:
X-Tel budgets selling expense budget (Amounts in $)
Month April May June
Sales commission 10,000 12,000 7,500
Sales Manager's salaries 10,000 10,000 10,000
Total 20,000 22,000 17,500
Explanation:
The selling expense shows the forecast of sales related expenses. These include the manager's salaries and the sales commission. The sales commission is a percentage of projected. It may be computed as follows;
Sales commission for
April
= 10%* $100,000
= $10,000
May
= 10%* $120,000
= $12,000
June
= 10%* $75,000
= $7,500