When prices are rising, the Cost of Goods Sold according to LIFO will be <u>higher </u>than cost of goods sold under FIFO.
Last-In, First-Out (LIFO) refers to a company selling off the latest inventory that it receives first before the inventory it received earlier.
When prices are rising, LIFO will result in a higher COGS because:
- Purchases will be high
- Closing stock will be low on account of only the earlier cheaper inventory being left
In conclusion, LIFO results in cost of goods sold being higher because the closing stock which is deducted from COGS will be lower.
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Answer: Micheal will earn an interest of $600 in the first year based on nominal interest rates.
Since we need to compute the interest paid out at the end of year 1, we use the following formula in order to find the interest
where
SI = Simple interest
P = Principal or initial amount invested
N = Number of years
R = Nominal interest rate
Nominal interest rate refers to the rate quoted on the CD or the rate agreed upon. In this question, the nominal interest rate is 3%.
Substituting the values in the formula above we get,
Answer:
a. Relevant
Explanation:
The documentary on prime time television that brought awareness to Cook Inc... being defendant in several lawsuits relating to it's defective tyres that has caused vehicles to overturn is a financial information that is relevant.
As a financial analyst, being presented with such information is very relevant and it makes me to consider it as a factor before issuing loan to the organization and also help to garner what the public'e perception of the company stock will be. In addition, the information will help to make predictions about future directions of the company's stock price and, evaluate the company's financial health and earnings potential to be able to pay back the loan if given the loan.
Answer: The options are given below:
A. Yes; the sales rep might learn about a new opportunity in the need recognition stage.
B. Yes; history has shown that online reordering can't be trusted.
C. Yes; straight rebuys require a lot of the sales rep's assistance.
D. No; this is a waste of time since straight rebuys are straightforward and easy to handle.
E. No; the sales rep should be looking for new customers instead.
The correct option is A. Yes; the sales rep might learn about a new opportunity in the need recognition stage.
Explanation: Maintaining a strong relationship with customers is very vital to a business. This is because a sales rep will get current, up-to-date, and firsthand information from customers about their changing needs and this will better equip the sales rep to meet the dynamic needs of customers promptly.
For instance, a customer might decide to increase the quantity of inks to be bought, this need recognition opportunity can only be known to the sales rep if the sales rep has always been in touch with the customer.
Answer:
Annual financial disadvantage = $ (669,600)
Explanation:
Relevant cost are future incremental cash costs that arise as a direct consequence of a decision.
The relevant costs of this decision to disconnected includes the following:
- The variable cost of making the product = $19 per unit
- Sales revenue at a price of $25
- Savings in avoidable fixed costs (102,000-72,000) = 30,000
Annual financial advantage
$
Lost contribution $(25-19)× 4,300 units = (85,800)
Saving in fixed cost = <u> 30,000</u>
M<em>onthly net loss </em><em><u> 55,800</u></em>
Annual financial disadvantage
Monthly net loss × 12 months
= (55,800) × 12
= $ (669,600)
