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Unformatted text preview: 9. Average cost method: COGS/ # of units available for sale 10. Managers choose inventory methods for a. Net income effects – report higher earnings for their company b. Income tax effects – managers prefer to pay the least amount of taxes as possible 11. Inventory turnover = COGS/inventory .reflect how many times average inventory was produced and sold during a period. 12. Page 149 slide 1!! 13. Perpetual system: Provides up-to-date inventory records, provides up-to-date cost of sales record. 14. Page 149 slide 3!! 15. Page 150 slide 1!! 16. LIFO liquidation – when a LIFO company sells more inventory than it purchases, items from beginning inventory become part of COGS...
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- Spring '05
- COGS, Oldest cost COGS, Recent cost COGS