Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

SA, a food processing company, decides to change the inventory cost estimation technique from weighted average to FIFO (first-in, first-out) basis in order to better

SA, a food processing company, decides to change the inventory cost estimation technique from weighted average to FIFO (first-in, first-out) basis in order to better represent how inventory is consumed in the business. The cost of inventory on a weighted average basis is G$6,890 whilst on a FIFO basis it is G$7,900. Which three of the following statements correctly explain the effect of the change in inventory cost estimation technique? Solution A.FIFO gives a higher cost than weighted average because prices are falling. B.FIFO gives a higher cost than weighted average because prices are rising. C.FIFO will result in a higher profit for the current year than weighted average. D.FIFO will result in a lower profit for the current year than weighted average. E.FIFO will result in higher current assets at the year-end than weighted average

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Principles of Accounting

Authors: Needles, Powers, crosson

11th Edition

1439037744, 978-1133626985, 978-1439037744

More Books

Students also viewed these Accounting questions

Question

a sin(2x) x Let f(x)=2x+1 In(be)

Answered: 1 week ago