Got a tricky question? Receive an answer from students like you! Try us!

Cost flow assumptions and effects of inventory errors - Math Problem Example

Only on StudentShare
High school
Math Problem
Science
Pages 2 (502 words)

Summary

(Ans)- When we calculate Cost of Goods Sold (CGS) using FIFO, no matter what method we use, the earliest price of available goods is used no matter how many other buying transactions occur in the mean time. However while using LIFO; whenever we make a new purchase transaction, the cost per unit value changes to that of the latest purchase.

Extract of sample
Cost flow assumptions and effects of inventory errors


(Ans)- Results using LIFO periodic calculations cannot be actual because in this case, the items are bought and sold frequently. Prices of such items are unstable and change often with a significant difference thus the values being used to calculate profit/loss margin will be faulty.
...
Download paper
Not exactly what you need?

Related Essays

Computational fluid dynamics in filters
Essentially, a CFD simulation protocol is so computationally intensive and involves such esoteric mathematical skills (because it involves the solution of non-linear partial differential equations) that individual efforts at completion of these Herculean tasks is next to impossible. So, recently many software companies have sprung up that provide requisite software tools for the same (most notably…
13 pages (3263 words)
Economic Effects of WaterPollution
In modern times, organic pollution has been on an upward trend to the environment and this is heavily because of the growing population the world is witnessing. One will find in a developed city, that there are so many people that the environment sewerage plants and sewerage plants are not able to take in all the waste and at the same time, function in its usual way. The excess waste becomes food…
11 pages (2761 words)
Research Proposal Master Research Proposal
These greenhouse gases, in large part, emanate from human activities, particularly the consumption of fossil fuels and the changes in the ways that land is used.…
10 pages (2510 words)
The Rusting Process
A closer look at the website of the company would suggest that its business is divided into three different segments.…
8 pages (2008 words)