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mixer [17]
3 years ago
12

In a period of steadily rising prices (meaning the cost to purchase inventory is increasing over time), what would be the implic

ations of choosing FIFO vs. LIFO
Business
1 answer:
IrinaK [193]3 years ago
4 0

Answer:

So choosing FIFO would yield the highest profit and net income.

Explanation:

When the purchase price is continuously rising the

  • FIFO assigns the lowest amount to cost of goods sold- yielding the highest gross profit and net income.
  • LIFO assigns the highest amount to the cost of goods sold -yielding the lowest gross profit and net income.

So choosing FIFO would yield the highest profit and net income.

FIFO assigns an amount to inventory closely approximating current replacement cost. First in First out charges costs to items old assuming that the earliest units purchased are first units sold.

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At the beginning of the month, the baking department of Mario Company had no beginning work in process inventory. At the end of
Phantasy [73]

Answer:

600 Units

Explanation:

Given:

Opening balance of inventory = 0 units

Ending balance of the month = 800 units

Finished units during the month = 1,200 units

Completed work in progress = 75% = 0.75

Ending work in process inventory = ?

Computation of ending work in process inventory:

Ending work in process inventory = Ending balance of the month × Completed work in progress

= 800 × 0.75

= 600 units

6 0
3 years ago
Haver Company currently produces component RX5 for its sole product. The current cost per unit to manufacture the required 68,00
Genrish500 [490]

Answer:

1.Total cost of making = $1,632,000.

2) Incremental cost of buying $<em>204,000 </em>

3.)The company should make the product as it will save $204,000 by doing so

Explanation:

1) Total cost of making = unit cost× units required cost

Total cost of making =  24.00 × 68,000= 1,632,000.0

2) Total incremental cost of buying

<em>Relevant cost of making</em>

Unit variable cost= (5.00 + 9.00+ (30%× 10)=17

Total variable cost of making = 17  ×68,000 =               1,156,000

<em>Relevant cost of buying        </em>68,000× 20   =                <u> 1,360,000 </u>

Incremental cost of buying                                             <u><em>204,000 </em></u>

<u><em></em></u>

3) Haver should make the product as it will save $204,000 by doing so

       

5 0
3 years ago
A company purchased land for $100,000 cash. Accrued real estate taxes on the land, $2,000, and real estate taxes on the land for
zheka24 [161]

Answer:

$118,000

Explanation:

We know the purchase price of land = $100,000

Also any kind of brokerage or commission is added to such cost as it is part of acquisition and one time expense, thus capital in nature.

Thus, $8,000 paid as brokerage will be added.

Also the one time expense in the capital nature being the demolishing expense will be added to cost.

Thus, net cost of land = $100,000 + $8,000 + $10,000 = $118,000

Some of the salvage sold results in an income for the company, and that shall form part of income statement, and has nothing to do with cost of land.

Thus, net historical cost = $118,000

7 0
3 years ago
Assume Ireland and Mauritania can both produce grain and dates, and that the only limited resource is the farming labor force, m
vesna_86 [32]

Answer:

Mauritania has an absolute advantage in the production of dates

Neither countries have an absolute advantage in the production of grains

Explanation:

A country has an absolute advantage in the production of a good or service if it produces more quantity of a good when compared to other countries

Ireland and Mauritania produces 10t grains. None of the countries have an absolute advantage in the production of grains

Mauritania produces 25t of dates while Ireland produces 5t of dates. 25 is greater than 5, so Mauritania has an absolute advantage in the production of dates

4 0
3 years ago
Cameron has applied for a loan to expand his young business. When bankers look for evidence of whether he will be able to repay
Readme [11.4K]

Answer:

what Cameron's firm has done in the past.

Explanation:

Small businesses do request for loans in some cases when they aim at using borrowed funds as capital to become more profitable in their business. When such requests are made, the bank can decide to look at what has been done in the past by the firm to ascertain if they can be able to repay the loan. They usually look at the current and past loans (If any) and debts that have been incurred by the business. In some cases, they also examine the bank accounts the business won and their tax IDs, etc.  

3 0
3 years ago
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