Calculate the revised TAT (Turn around Time) or setup time of new processes.

Question

Jane Yoakim, President of Estefan Co., recently read an article that claimed that at least 100 of the country's 500 largest companies were either adopting or considering adopting the last in, first out (LIFO) method for valuing inventories. The article stated that the firms were switching to LIFO to (1) neutralize the effect of inflation in their financial statements, (2) eliminate inventory profits, and (3) reduce income taxes. Ms. Yoakim wonders if the switch would benefit her company. Estefan currently uses the first-in, first-out (FIFO) method of inventory valuation in its periodic inventory system. The company has a high inventory turnover rate, and inventories represent a significant proportion of the assets. Ms. Yoakim has been told that the LIFO system is more costly to operate and will provide little benefit to companies with high turnover. She intends to use the inventory method that is best for the company in the long run rather than selecting a method just because it is the…

Answer 1

Question

Chapter 27, Problem 3MAD

A.

To determine

Calculate the revised TAT (Turn around Time) or setup time of new processes.

B.

To determine

Calculate the ratio of revised TAT between old and new processes.

C.

To determine

Calculate the number of additional surgeries performed in an 8 hours day, if average surgical time is 40 minutes.

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Jane Yoakim, President of Estefan Co., recently read an article that claimed that at least 100 of the country's 500 largest companies were either adopting or considering adopting the last in, first out (LIFO) method for valuing inventories. The article stated that the firms were switching to LIFO to (1) neutralize the effect of inflation in their financial statements, (2) eliminate inventory profits, and (3) reduce income taxes. Ms. Yoakim wonders if the switch would benefit her company. Estefan currently uses the first-in, first-out (FIFO) method of inventory valuation in its periodic inventory system. The company has a high inventory turnover rate, and inventories represent a significant proportion of the assets. Ms. Yoakim has been told that the LIFO system is more costly to operate and will provide little benefit to companies with high turnover. She intends to use the inventory method that is best for the company in the long run rather than selecting a method just because it is the…

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