Inventory

Question 1

INVENTORY PRICING IMPACTS

Answer 1

PRICING IMPACTS
RISING PRICES – Inflactionary Period
End Inventory COGS Gross Profit Net Income
FIFO High Low High High
LIFO Low High Low Low
FALLING PRICES
End Inventory COGS Gross Profit Net Income
FIFO Low High Low Low
LIFO High Low High High

Question 2

FOB destination

Answer 2

Title passe at delivery
The packaging, shipping, and handling costs are not included in the buyer’s inventory

Question 3

Period and perpetual use

Answer 3

Periodic use weighted average
Perpetual use moving average

Question 4

Cost of Sales

Answer 4

Selling price /
1+ markup percentage