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Able Manufacturing Corporation makes water pumps that are used in residential and commercial building. The company uses FIFO inventory method for manufacturing process of its
Able Manufacturing Corporation makes water pumps that are used in residential and commercial building. The company uses FIFO inventory method for manufacturing process of its basic commercial water pump and the LIFO inventory method for the costs associated with conversion of core pump into pumps suitable for residential installation. Is the company using a proper method of accounting for its inventory in accounting for its inventory costs? Why or Why not? Assuming the company is using the incorrect method, what should the company do?
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