(Appendix A) A new member of the controller’s staff in your company, a large producer of paper products, has just completed a report that urges the company to adopt the last-in, first-out (LIFO) method of process costing.

The controller is concerned about the recommendation because the cost records are maintained on a FIFO basis.

Indeed, the controller has not even heard of using LIFO for process-cost accounting. Form small groups to prepare a report addressing the following:

a. Would it be possible to use LIFO for process costing?

What are the key issues? Would using it be desirable?

b. In your library or on the Internet (company home pages or the SEC’s EDGAR database), obtain information on inventory policies of four paper manufacturers

(e.g., MeadWestvaco, Weyerhaeuser, Simpson Paper).

Describe how firms in this industry account for their process costs.