Answer:
Compute the amount of phantom profit that would result if the company used FIFO rather than LIFO.
- If the company used FIFO instead of LIFO, their profits would increase by $1,960 - $1,720 = $240 because their COGS would be lower.
Explain why this amount is referred to as phantom profit.
- Phantom profit basically refers to the profit that the company could have made using a different accounting method.
Identify the impact of LIFO versus FIFO.
- LIFO increases COGS by $240, reducing gross profits by the same amount.
Explanation:
units price total
purchase 100 $6 $600
purchase 200 $7 $1,400
purchase 140 $8 $1,120
total 440 $3,120
ending inventory 180
using LIFO $1,160
using FIFO $1,400
COGS using LIFO = $3,120 - $1,160 = $1,960
COGS using FIFO = $3,120 - $1,400 = $1,720
If the company used FIFO instead of LIFO, their profits would increase by $1,960 - $1,720 = $240 because their COGS would be lower.
<span>(C) "In addition, it introduces a policy to provide free education
to all children up to grade 10." This step is aimed at producing more
skilled labor. I hope this helps you! <3</span>
The answer to the given question above would be the third option. Based on the given scenario above about Ryan who attended a seminar on environmental conservation, what he can do to achieve his objective is to <span> use a compost pile to dispose of food wastes. Hope this helps.</span>
