Reference no: EM131258211
Mannisto, Inc., uses the FIFO inventory cost flow assumption. In a year of rising costs and prices, the firm reported net income of $213,639 and average assets of $1,475,450. If Mannisto had used the LIFO cost flow assumption in the same year, its cost of goods sold would have been $38,070 more than under FIFO, and its average assets would have been $37,840 less than under FIFO.
Suppose that two years later costs and prices were falling. Under FIFO, net income and average assets were $257,329 and $1,791,990, respectively. If LIFO had been used through the years, inventory values would have been $48,060 less than under FIFO, and current year cost of goods sold would have been $20,463 less than under FIFO. Calculate the firm's ROI under each cost flow assumption (FIFO and LIFO). (Enter your answers as percentages rounded to 1 decimal place (i.e., 12.2%).)
SOLVE:
ROI: FIFO%=? LIFO%=?
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: Mannisto, Inc., uses the FIFO inventory cost flow assumption. In a year of rising costs and prices, the firm reported net income of $213,639 and average assets of $1,475,450. If LIFO had been used through the years, inventory values would have been $..
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