Accounting Department Memorandum To: Executive Vice President From: Yvonne Dixon and Teammates Subject: Last In/First Out (LIFO) versus First In/First Out (FIFO) Date: February 13‚ 2012 Executive Vice President‚ Late last week our team had a team meeting to discuss LIFO versus FIFO methods of inventory for the Cost of Goods Sold (COGS) as to our company needs. This was a very lengthy and well communicated process for our team. I feel that we as a team have worked to give you the best
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Merrimack Tractors and Mowers‚ Inc.: LIFO or FIFO? 1.- Study the financial information for reel mower units that James Colburn prepared for Rick Martino. (Assume that the reel mower units are typical of all classes of inventory at Merrimack). Prepare a pro-forma income statement assuming no changes in accounting policy for 2008‚ and assuming the company sells 10‚000 units each quarter at a price of 2‚000 per unit with Sales General and Administration costs the same as for 2007. Sales Quarter Units
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Process Costing Characteristics of Process Manufacturing • Since each product within a product line passing through the processes would receive similar ‘‘doses’’ of materials‚ labor‚ and overhead‚ costs are accumulated by process. • Process costing works well whenever relatively homogeneous products pass through a series of processes and receive similar amounts of manufacturing costs Units are homogeneous and subjected to the same operations for a given process and each unit produced in a
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3217 DECEMBER 9‚ 2008 WILLIAM E. BRUNS SHARON M. BRUNS SUSAN HARMELING Merrimack Tractors and Mowers‚ Inc.: LIFO or FIFO? Ricardo “Rick” Martino‚ president and chief operating officer of Merrimack Tractors and Mowers‚ Inc.‚ of Nashua‚ New Hampshire‚ felt that his job had grown much more complicated during 2007 and 2008. Merrimack was a major regional manufacturer and seller of large commercial grass mowers based on a design developed by his grandfather in the years after World War II
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11. A total variance is best defined as the difference between total a. actual cost and total cost applied for the standard output of the period. b. standard cost and total cost applied to production. c. actual cost and total standard cost of the actual input of the period. d. actual cost and total cost applied for the actual output of the period. 12. The term “standard hours allowed” measures a. budgeted output at actual hours. b. budgeted output at standard hours. c. actual output
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other inventory systems such as FIFO and LIFO. FIFO means‚ first-in-first out. The primary purpose of FIFO inventory management practice in retail stores is to rotate stock so that it remains fresh‚ new‚ and in good condition for the consumer. This practice reduces returns and inventory write downs Conversely‚ LIFO means last in first out.In terms of how a company reports their financials‚ LIFO and FIFO have different advantages and disadvantages. For instance‚ with FIFO‚ as long as a company ’s good
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Costs assigned to the building of a house should appear on the income statement when Answer a. the purchase order to manufacture the house is received. b. the house is sold. c. cash is collected for the sale of the house. d. the house is completed. The basic document for keeping track of costs in a job order costing system is a Answer a. labor time card. b. job order cost card. c. process cost report. d. materials requisition form. The following information is available at the
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Regulating Inventory – An Examination of AASB 102 “Inventories” Inventories are in essence what organisations hold with an intention to sell‚ however directly or indirectly. For most businesses‚ this is how their profits are made‚ and it is reasonable to assume that these items account for much of an organisation’s activities. Such a big influence on indicators of financial performance and position warrants an equally large need for regulation to ensure that users of the financial statements are
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percentage-of-completion to completed-contracts. http://share.pdfonline.com/5c8e45d55742447e97c79590cb6ead5d/ch22.htm Page 1 of 35 CHAPTER 22 6/18/13 9:36 PM d b c a b b c d c c b 28. Disclosures required for a change from LIFO to FIFO. 29. Change from FIFO to LIFO. 30. Change in accounting estimate. 31. Change in accounting estimate. 32. Identify a change in accounting estimate. 33. Change in accounting estimate. 34. Identify a change in accounting estimate. 35. Identify a change in reporting
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weighted-average method to account for inventories‚ the assignment of costs to work in process at the end of February is a. $300‚000. b. $266‚250. c. $166‚525. d. $139‚500. 4. If Top That uses the first-in‚ first-out (FIFO) method to account for inventories‚ the equivalent units of work for the month of February are Direct Materials Conversion Costs a. 225‚000 225‚000 b.
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