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Explain why ford management chose to use lifo for certain of

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Reference no: EM13972004

Analyzing Notes to Adjust Inventory from LIFO to FIFO - The following note was contained in a recent Ford Motor Company annual report:

Inventories at December 31 were as follows (dollars in millions)

 

Current Year

Previous Year

Raw material, work in process, & supplies

3016

4360

Finished products

6493

6861

Total inventories at FIFO

9509

11221

Less LIFO Adjustment

-891

-1100

Total

8618

10121

1. What amount of ending inventory would have been reported in the current year if Ford had used only FIFO?

2. The cost of goods sold reported by Ford for the current year was $127,103 million. Determine the cost of goods sold that would have been reported if Ford had used only FIFO for both years.

3. Explain why Ford management chose to use LIFO for certain of its inventories.

Reference no: EM13972004

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