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Business Accounting 24 MONTH MYLAB (MAN)

Strategies to doubling net income. Introduction: Inventories are defined as assets that are held for sale, in process of production for such sale, or in the form of materials or supplies to be consumed in the production supply. Inventory valuation is important as it helps in analyzing the liquidity of a company and its effect on the income statement and balance sheet. In the given case, several strategies for doubling net income are as follows − 1. Adoption of the right inventory valuation method − different inventory valuation methods provide different values for ending inventory and cost of goods sold. (a) Under a first-in-first-out basis, the issued inventories are valued at historical prices. Thus, in case of a rising price trend, the FIFO method would provide the least value for the cost of goods sold and the highest value for ending inventory. (b) Under the last-in-first-out method, the issued inventories are valued at current prices. Thus, in the case of a rising price trend, the LIFO method would provide the highest value for the cost of goods sold and the least value for ending inventory. (c) Average method provides a middle value for COGS and ending inventory and the specific identification method provides a method as per the inventory specified. Thus the right inventory method under rising or falling pricing trends would provide the appropriate cost of goods sold that would increase or decrease the net income from the former practice. The right inventory valuation method can boost net income two to three folds. 2. Providing sales incentives − Sales incentives are the discounts and coupons that are given to customers for purchasing in lots. This is a method to increase sales volume. By increasing sales volume a company can double its net income without affecting the sales price. 3. Controlling the indirect expenses − Indirect expenses are the overheads that are incurred to support the manufacturing or sales activity. These expenses are not directly associated with the production or sales but help in conducting them. After COGS, these expenses make up most of the total cost. A strategic reduction in the overhead cost can help in doubling net income. 4. Other tactics − Other tactics like marketing campaigning, brand building, and making loyal customers can also play a pivotal role in doubling net income.

Strategies to doubling net income. Introduction: Inventories are defined as assets that are held for sale, in process of production for such sale, or in the form of materials or supplies to be consumed in the production supply. Inventory valuation is important as it helps in analyzing the liquidity of a company and its effect on the income statement and balance sheet. In the given case, several strategies for doubling net income are as follows − 1. Adoption of the right inventory valuation method − different inventory valuation methods provide different values for ending inventory and cost of goods sold. (a) Under a first-in-first-out basis, the issued inventories are valued at historical prices. Thus, in case of a rising price trend, the FIFO method would provide the least value for the cost of goods sold and the highest value for ending inventory. (b) Under the last-in-first-out method, the issued inventories are valued at current prices. Thus, in the case of a rising price trend, the LIFO method would provide the highest value for the cost of goods sold and the least value for ending inventory. (c) Average method provides a middle value for COGS and ending inventory and the specific identification method provides a method as per the inventory specified. Thus the right inventory method under rising or falling pricing trends would provide the appropriate cost of goods sold that would increase or decrease the net income from the former practice. The right inventory valuation method can boost net income two to three folds. 2. Providing sales incentives − Sales incentives are the discounts and coupons that are given to customers for purchasing in lots. This is a method to increase sales volume. By increasing sales volume a company can double its net income without affecting the sales price. 3. Controlling the indirect expenses − Indirect expenses are the overheads that are incurred to support the manufacturing or sales activity. These expenses are not directly associated with the production or sales but help in conducting them. After COGS, these expenses make up most of the total cost. A strategic reduction in the overhead cost can help in doubling net income. 4. Other tactics − Other tactics like marketing campaigning, brand building, and making loyal customers can also play a pivotal role in doubling net income.

24 MONTH MYLAB (MAN)

24 MONTH MYLAB (MAN)

7th Edition

ISBN: 9780136503521

Author: MILLER-NOBLES

Publisher: PEARSON

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Chapter 6 Solutions

24 MONTH MYLAB (MAN)

Ch. 6 - Which principle or concept states that businesses...Ch. 6 - Which inventory costing method assigns to ending...Ch. 6 - Assume Nile.com began April with 14 units of...Ch. 6 - Suppose Nile.com used the weighted-average...Ch. 6 - Which inventory costing method results in the...Ch. 6 - Prob. 6QC Ch. 6 - At December 31, 2016, Stevenson Company overstated...Ch. 6 - Suppose Maestros had cost of goods sold during the...Ch. 6 - Suppose Nile.com used the LIFO inventory costing...Ch. 6 - Prob. 1RQ

Ch. 6 - Prob. 2RQ Ch. 6 - Prob. 3RQ Ch. 6 - What is the goal of conservatism?Ch. 6 - Prob. 5RQ Ch. 6 - Under a perpetual inventory system, what are the...Ch. 6 - Prob. 7RQ Ch. 6 - Prob. 8RQ Ch. 6 - What does the lower-of-cost-or-market (LCM) rule...Ch. 6 - What account is debited when recording the...Ch. 6 - What is the effect on cost of goods sold, gross...Ch. 6 - When does an inventory error cancel out, and why?Ch. 6 - Prob. 13RQ Ch. 6 - Prob. 14RQ Ch. 6 - Prob. 15ARQ Ch. 6 - Prob. 16ARQ Ch. 6 - Determining inventory accounting principles Ward...Ch. 6 - Prob. 6.2SE Ch. 6 - Prob. 6.3SE Ch. 6 - Use the following information to answer Short...Ch. 6 - Use the following information to answer Short...Ch. 6 - Use the following information to answer Short...Ch. 6 - Comparing Cost of Goods Sold under FIFO, UFO, and...Ch. 6 - Prob. 6.8SE Ch. 6 - Prob. 6.9SE Ch. 6 - Prob. 6.10SE Ch. 6 - Prob. 6.11SE Ch. 6 - Prob. 6.12SE Ch. 6 - Prob. 6.13SE Ch. 6 - Using accounting vocabulary Match the accounting...Ch. 6 - Prob. 6.15E Ch. 6 - Prob. 6.16E Ch. 6 - Use the following information to answer Exercises...Ch. 6 - Prob. 6.19E Ch. 6 - Prob. 6.20E Ch. 6 - Prob. 6.21E Ch. 6 - Prob. 6.22E Ch. 6 - Prob. 6.23E Ch. 6 - Prob. 6.24E Ch. 6 - Prob. 6.25E Ch. 6 - Prob. 6.26E Ch. 6 - Prob. 6.27E Ch. 6 - Prob. 6.28AP Ch. 6 - Prob. 6.29AP Ch. 6 - Prob. 6.30AP Ch. 6 - Prob. 6.31AP Ch. 6 - Prob. 6.32AP Ch. 6 - Prob. 6.33BP Ch. 6 - Prob. 6.34BP Ch. 6 - Prob. 6.35BP Ch. 6 - Prob. 6.36BP Ch. 6 - Prob. 6.37BP Ch. 6 - Prob. 6.38CP Ch. 6 - Prob. 6.39PS Ch. 6 - Prob. 6.1COP Ch. 6 - Prob. 6.1CTDC

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