Pioneer Resource, Inc., reported the following in its Notes to Consolidated Financial Statements for 1999.

Material and Supplies: Inventories of new and reusable material and supplies are stated at the lower of cost or market with cost determined on a FIFO or average cost basis. For certain large individual items, however, cost is determined on a specific identification basis.

Required

a. Identify and explain,in your own words,all of the inventory costing methods used by Pioneer Resource.

b. Why might Pioneer Resource use these different methods? Do these various inventory methods enhance the internal consistency and usability of Pioneer Resource’s financial data? Why?

c. If inventories comprised only 1% of Pioneer Resource’s assets, how would that change your views on Pioneer’s use of these different inventory costing methods? What if inventories were 15% of Pioneer Resource’s assets?

d. If the inventory balances reported by Pioneer Resource in 1999 and 1998 were $212.3 and $212.2 million, respectively, how would that change your view of Pioneer Resource’s choice of reporting methods? Note that Pioneer Resource’s 1999 total assets exceeded $22.4 billion. If in subsequent years you found that Pioneer Resource’s inventories had increased by 300%, how would that change your views of these diverse inventory costing methods?