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Posted: November 11th, 2022

You have another brilliant idea that

You have another brilliant idea that you wish to suggest to your boss. You wish to promote t-shirts on the corporate intranet website to workers to earn more money.
The t-shirts could be bought by workers for themselves, members of the family, suppliers, or prospects. You will promote the t-shirts for $25 every. Your boss agrees along with your idea and tells you to proceed.
To proceed, it’s essential to discover a vendor that can provide you with the t-shirts and construct up your stock.
• On 2/1/xxxx you discovered a vendor that can provide you with t-shirts for $5 every and you buy 500 t-shirts.
Sadly, the seller you have been working with instantly went out of enterprise and you could shortly discover another vendor.
• With some success, you do discover another vendor nonetheless, the associated fee to you is $15 per t-shirt and also you resolve to buy 1,000 t-shirts and also you place this order on 2/15/xxxx.
As soon as once more, the second vendor goes out of enterprise and you could discover but another vendor. You another, however issues are getting worse. The seller is aware of you want the stock and are determined.
• The brand new vendor decides to cost you $20 per t-shirt. You are getting in orders so that you have an idea of what your gross sales ought to be, and also you have no alternative however to buy 1,100 t-shirts from this vendor at $20 per t-shirt.
To summarize, listed here are your stock purchases:
Date # of Models Value per Unit
2/1/xxxx 500 $5.00
2/15/xxxx 1,000 $15.00
three/1/xxxx 1,100 $20.00
Now that you have stocked up on stock, gross sales start coming in.
Your gross sales exercise for April, Might, and June are as follows:
Month # of Gross sales
April 700
Might 800
June 1,000

Working with the connected Excel spreadsheet, you might be to find out which stock methodology could be higher to make use of primarily based on the gross revenue. LIFO has been ready for you.
You should calculate FIFO. Then you’ll examine LIFO in opposition to FIFO and decide which methodology you’ll suggest.
Excel Worksheet: M8 – LIFO and FIFO.xlsx Obtain M8 – LIFO and FIFO.xlsx
When you have decided, you might be to submit a memo to your boss and embrace the next:
• Recap the idea
• Clarify that you might be making ready this memo to distinguish the gross revenue primarily based on a listing methodology.
• Clarify what LIFO is (Outline).
• Why would some industries use LIFO over FIFO?
• What are the outcomes utilizing the LIFO stock methodology?
• Clarify what FIFO is (Outline)
• Why would some industries use FIFO over LIFO?
• What are the outcomes utilizing the FIFO stock methodology?
• What’s your advice to your boss primarily based in your calculations? The memo could be 1 – 2 pages (or extra for those who really feel the necessity).
Memo Template: Memo Template.docx
• M8- LIFO and FIFO Excel File
• Memo – Written Paper

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