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Burner & Brett, a partnership, had the following inventory data: Burner & Brett need to know the

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Burner & Brett, a partnership, had the following inventory data:
Burner & Brett, a partnership, had the following inventory data: Burner

Burner & Brett need to know the company's gross profit percentage and rate of inventory turnover for 2016 under
1. FIFO.
2. LIFO.
Which method produces a higher gross profit percentage? Inventory turnover?

Transcribed Image Text:

2015 2016 Ending inventory at: FIFO Cos. $24,920 S 33,500 LIFO Cost... 12,500 20,160 Cost of goods sold at S 87,630 97,980 138,000 FIFO Cost

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1 2 FIFO LIFO Gross profit percentage 138000 87630 138000 97...View the full answer


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Financial Accounting

Financial Accounting

ISBN: 978-0134127620

11th edition

Authors: Walter Harrison, Charles Horngren, William Thomas, Wendy Tietz

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Related Video

Inventory turnover is a key metric that helps businesses evaluate the efficiency of their operations. A high turnover ratio is generally considered positive, indicating that the company is effectively selling its inventory and making efficient use of its resources. On the other hand, a low turnover ratio may indicate issues such as overstocking or slow sales and may require further examination to identify and address the underlying causes. Businesses use this ratio to make decisions about inventory levels, production schedules, and pricing strategies. It also helps businesses to identify areas where they may need to make improvements, such as reducing lead times for production or optimizing sales and marketing efforts. Additionally, inventory turnover is used by investors and analysts as a key performance indicator to evaluate the financial health and growth potential of a company.

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