The following information is available for NUBD Corp. for its first year of operations: Sales in units Production in units 5,000 8,000 Manufacturing costs: Direct labor Direct material Variable overhead Fixed overhead Net income (absorption method) Sales price per unit P3 per unit P5 per unit P1 per unit P100,000 P30,000 P40

The following information is available for NUBD Corp. for its first year of operations: Sales in units Production in units 5,000 8,000 Manufacturing costs: Direct labor Direct material Variable overhead Fixed overhead Net income (absorption method) Sales price per unit P3 per unit P5 per unit P1 per unit P100,000 P30,000 P40

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Similar questions

FIFO and weighted average. But what if a company wants to use LIFO to report its inventory because of the significant tax benefit? How could dollar-value LIFO help them use FIFO for managerial purposes but LIFO for financial statement reporting?
When inventory costs rise and inventory quantities are not decreasing, what does the LIFO produces?
24. Under which method may companies manipulate their income by choosing which units to sell? a) FIFO b) LIFO c) Weighted Average d) Specific Identification
the company assesses the inventory at full production cost. explain (without figures) how it will affect the calculated return on equity (EKR) for 2021 if the company had used a variable manufacturing cost when assessing inventories. Can this company choose variable delivery cost as a valuation principle for self-produced goods?
What is the dollar-value method of LIFO inventory valuation?What advantage does the dollar-value methodhave over the specific goods approach of LIFO inventoryvaluation? Why will the traditional LIFO inventory costingmethod and the dollar-value LIFO inventory costingmethod produce different inventory valuations if thecomposition of the inventory base changes?
During periods of increasing unit costs, the LIFO inventory method resulys in lower income taxes. True or False
Which of the following statements Is/are true? Multiple Cholce In a period of rising costs and stable inventory levels, using the FIFO method leads to a higher taxable income and higher net income compared to the LIFO method. All of the other answer choices are true. In a period of falling costs and stable inventory levels, cost of goods sold is the same under LIFO and FIFO. In a period of rising costs and stable inventory levels, using the LIFO method leads to a lower taxable income and higher net income compared to the FIFO method.
In the economic order quantity model the return on capital that is forgotten when it is invested in inventory is a/an a. Carrying costs b. Exclusion in the EOQ computation c. Irrelevant cost d. Order cost
The normal profit Required: What unit value should Royal Decking use for each of its products when applying the lower of cost or market (LCM) rule to units of ending inventory? (Do not round Intermediate calculations. Round final answers to 2 decimal places.)
Which of the following regarding the lower of cost ormarket rule for inventory are true?(i) The lower of cost or market rule is an example of thehistorical cost principle.(ii) When the market value of inventory drops belowthe original cost of inventory shown in the financialrecords, net income is reduced.(iii) When the market value of inventory drops belowthe original cost of inventory shown in the financialrecords, total assets are reduced.a. (i) only c. (ii) and (iii)b. (ii) only d. All of the above
Consider the following two statements: 1. If a company uses the LIFO cost flow method for its income tax return, it must also use LIFO for its financial statements. II. If a company uses an accelerated depreciation method (i.e., double-declining balance, MACRS) for its income tax return, it can use the straight-line method for its financial statements. Which of the above statements (is) are true? O I only Il only neither statement is true. both I and II
Which one of the following statements is true? a. Income manipulation is difficult under LIFO.b. Accounting principles do not require that the inventory cost flow approximate the physical flow of goods.c. Companies may use LIFO for tax purposes and FIFO in the financial statements.d. In periods of declining prices, LIFO will result in the payment of less income taxes.