|[pic] | |ASSIGNMENT COVER SHEET | | | |Electronic or manual submission | | | | | |UNIT
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CHAPTER 2 Accounting for Materials Review Summary 1. Materials control includes physical control of materials and control over the investment in materials. Effective physical control of materials involves limiting the access to stored materials, segregating the duties of employees who handle materials and materials reports, and establishing an accurate recording system for materials purchases and issues. Only authorized personnel should be permitted in material storage areas, and procedures
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from beginning inventory and purchases. 2) Average method is based on the average cost of items available for sale during a period. 3) Perpetual method is the most accurate and is widely used. With this method inventory is kept count at all times. 4) FIFO or first-in, first-out, use the cost of beginning inventory or oldest inventory to base calculations on. 5) LIFO or last-in, first-out bases the calculation of cost of the item on the last item purchased. This method is often used to cut tax cost assuming
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business incurs. Valuation methods A company can value its inventory using several methods. The two most important methods are LIFO (“last in first out”) and FIFO (“first in, first out”). Under FIFO, the cost of goods sold (COGS) is based upon the cost of material bought earliest in the period. During periods of inflation, the use of FIFO will result in a lower estimate of COGS and a larger net income. Under LIFO, the COGS is based upon the cost of material bought towards the end of the period
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to Manzana’s ability to compete with Golden Gate,whose quicker guaranteed turnaround time will generate loyalty among independentagents and result in further loss of business for Manzana. To prevent this, thefollowing steps are recommended:-(i)the FIFO system on all requests received should be strictly implemented;(ii)the reward system for employees should be reviewed and aligned to supportthe implementation of (i);(iii) RERUNs should be sent to Distribution Clerks at least three days prior to theexpiry
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Technology & Operation Management, GSM 430 Case Analysis Content: Manzana Insurance is a property insurance company that operates through a network of branch offices. It does not deal directly with the public but with independent agents who in return deal with the customers. Agents require Low turnaround time and fast renewal rates. Initial analysis of the second quarter performance figures of Fruitvale branch at Manzana Insurance indicates declining profits, poor operating performance and
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what will be his cost of goods sold and ending inventory next year under the LIFO method? c. How would you answer (a) and (b) if David had initially selected the first-in, first-out (FIFO) method instead of LIFO? d. Suppose that David initially adopted the LIFO method, but wants to apply for a change to FIFO next year. What would be his §481 adjustment for this change, and in what year(s) would he make the adjustment? a. Under the LIFO method, this year David should record a cost of goods
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subtracted by COGS which then changes the gross profit ratio as well. Repeat requirements 1 and 2 assuming that Cast Iron uses the FIFO inventory cost method rather than the LIFO. See above Why does the number of units purchased have no effect on the answers to requirements 1 and 2 when FIFO method is used. FIFO is a method of valuing the COGS and uses the older inventory first. In this particular case because there is no difference in the gross
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The only reason this one could come up with some wrong figures is because this does not take into account any items that were lost, stolen or damaged throughout the accounting period. Another method is the first-in, first-out method, also know was FIFO. This method is very simple they assume the oldest units in the inventory are always the first sold. Then the last-in, first-out method is just the reverse also known as LIFO. This means the newest items that are in inventory are the first ones sold
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Accounting Memp Interforoffice Memo TO: ACCOUNTING TEAM MATE FROM: ANDREW ACCOUNTANT SUBJECT: LIFO FIFO EXPLANATION DATE: 2/24/2015 Occasionally an individual who works at a company in a certain department is required to pass on information to another department or a supervisor. It is necessary to make this memo accurate and professional since information on inventory valuations has been requested by the executive vice president. To be considered that they are not aware of the jargon
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