11110memo3 - are similar items, similar in use, or...

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Memorandum To: CM 2 Management Team From: Leah Celani, Accountant Date: November 1, 2010 Subject: Switching from LIFO to dollar-value LIFO I have concluded that the best option for your company is to change to dollar-value LIFO to minimize LIFO liquidations. The dollar-value LIFO method determines and measures any increases and decreases in a pool in terms of total dollar value, not the physical quantity of the goods in the inventory pool. By using the dollar-value LIFO, your company will be able to include a broader range of goods in the dollar-value approach. Furthermore, the dollar-value LIFO method allows you to replace goods that
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Unformatted text preview: are similar items, similar in use, or interchangeable. Therefore, dollar-value LIFO techniques help protect LIFO layers from erosion. Also, in the dollar-value LIFO method, one pool main contain your entire inventory. Under this method, with more goods included in a pool, the more likely that increases in quantities of some goods offset decreases in other goods in the same pool. This will help your company avoid liquidation of the LIFO layers....
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This note was uploaded on 11/29/2010 for the course ACC 331 taught by Professor Dr.lee during the Fall '10 term at Jefferson College.

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