(Solution) BUS 1102 Written Assignment Unit 5 -FIFO

COURSE

BUS 1102 – Basic Accounting

  1. Propose the inventory valuation method you would advise the company to use.
  2. Explain why you think it is the best suited for the business.
  3. Explain the cost of goods sold, ending inventory, and how the inventory valuation method you have chosen may impact these two factors.

SOLUTION 

  1. Propose the inventory valuation method you would advise the company to use.

First-in, first-out (FIFO) is the ideal inventory valuation approach to use when there are cash flow issues with inventory and depreciation of the inventory. Yet I would be wary of utilizing it due to the company’s focus on the medical industry and the special care that must be taken while handling pharmaceutical materials. If I were to propose this plan to a corporation that sells products to the healthcare and hospital industries, I would have a few concerns.

  1. Explain why you think it is the best suited for the business.

As I indicated above, the fact that we deal in medical supplies necessitates additional vigilance regarding the use-by date, so that’s the first reason I went with FIFO. ….please click the icon below to purchase the solution at $10