Conversion of Decision Making Cost to Cost for External Reporting—Miultiple Products.

Smith Candies manufactures two types of candies in its plant in Charleston. Information on these two products is shown below. Smith uses FIFO for reporting cost information to outside owners and creditors.

Crunchies Yummies Beginning inventory (all finished goods 100 % complete) .

CASS ORGAN Vuieretes ss,« im wsansiis: Scumgubet sess «ae niles 15,000 10,000 Dollars (external reporting value) ............. $ 150,000 $ 50,000 Production information for the past year Number of Cases. Droduced stein wsisteiy

‘Fotal Tabor hoGrs Worked | ...00 eee bs eects 36,000 12,500 Ending inventory CaSeS OL CADGY wativds sentry: Ack b ogbpe wits 10,000 15,000 Total manufacturing overhead for the year amounted to $291,000, and the estimated labor hours in ending inventory for the two products are:

CEUNCHIOS o.<. wesc ace lane

Compute the cost of sales the company will report in its external income statement for each product.

Compute the total ending inventory of finished goods reported in the balance sheet for each product.

Which product has the highest inventory turnover?

Explain how your calculation would differ for cost of sales and ending inventory if the company used LIFO instead of FIFO costing in its published financial statements.

Present no calculations; just give an explanation.

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