Identify any FIFO-computed values that are useful for analysis purposes, and explain how they are determined using financial statement information. Why would businesses be interested in selecting the LIFO cost flow inventory method? What are the 4 basic types of inventory cost flow as...
Determine the cost of goods sold and endinginventory under the periodic inventory system for each of the four inventory costing methods:Specific identification First-in, first-out (FIFO) Last-in, first-out (LIFO) Weighted average3▪These are calculated atthe end of the period using the ...
Determine the weighted average cost of capital using book value weights. Weighted Average Cost of Capital: When a company uses more than one source of capital to finance its fixed assets, then the individual cost of raising capital will lose its relevance, and the need to determine the...
It’s calculated using the following formula: Break-even point (BEP) in unit sales = total fixed costs / (sale price – variable cost) This is the break-even formula that companies use to calculate the number of units required to be sold in order to cover its expenses, without making a...
Unit Cost Period Report Provides the average cost of each item or pool for the last five periods Valuation Detail Report A detail for any LIFO, FIFO, or Weighted Average Cost valuation method Includes the layers for all pools and items, showing the openings, incomings, outgoings, and closin...
Using different Cost Flow Methods may (and usually does) result in a different COGS number. FIFO: First in First Out means that the unit first purchased (July 9) is the first unit sold (on July 31). When a unit is sold, you Debit COGS. So, the sale of inve...
Which costing method cannot be used to determine the cost of inventory items before lower-of-cost-or-market is applied? Determine the total cost of P1 and P2 using the step method. How do I calculate the expenditure price variance? How would a company determine whether to use multi...
Assume a company uses the LIFO cost flow assumption. Identify any FIFO-computed values that are useful for analysis purposes, and explain how they are determined using financial statement information. What general criteria should be used to determine ...
How do companies decide on inventory cost assumptions?What is financial data and how does the company prepare the data each accounting period?How do you calculate retained earnings with assets and liabilities?What is the maturity-matching approach to financing a company...
Explain how to know if gross margin using LIFO is higher or lower than FIFO. Explain how to show the cost of goods sold on a profit and loss statement. How do you account for an inventory item when cost for a new unit goes up? How is the break-...