ACCT30210 Chapter 17: SCM3717-Chapter17Ch.17Homework
Document Summary
*conversion costs = direct labor and manufacturing overhead. Using lifo can lower company"s taxable income and the tax burden. Because lifo tends to lead to lower net income than fifo because it reports a higher cogs because we"re using last in, first out (the most recent costs tend to be the most costs because of inflation) When companies use lifo they are expensing inflation. If use lifo for internal purposes, must use for external purposes as well. So us and international companies would use lifo for us purposes and. Used when you"re mass producing goods or services. In contrast to job-costing, which you use when costing unique, identifiable units of a product or service. The key part of this is valuing inventory, so estimating the percentage of completion. Degree of completion: in may (next period) we have to add the remaining 10% to complete this batch with respect to direct materials.
