Scribd Logo
Upload

Welcome to Scribd!

  • 164 views

    Costing and Pricing - 02 - Activity - 1

    Uploaded by

    JERMAINE APRIL LAGURAS
    1) Expedia Industries is the largest supplier of women's clothing in the US and wants to establish a costing procedure to monitor raw material inflows and outflows related to production. 2) The board members disagree on whether to use the FIFO or moving average costing method. 3) FIFO is recommended over moving average because it is simpler and more straightforward, allowing Expedia to easily develop a system to monitor raw material flows in line with their objective.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Flag for inappropriate content

    Costing and Pricing - 02 - Activity - 1

    Uploaded by

    JERMAINE APRIL LAGURAS
    164 views1 page
    1) Expedia Industries is the largest supplier of women's clothing in the US and wants to establish a costing procedure to monitor raw material inflows and outflows related to production. 2) The board members disagree on whether to use the FIFO or moving average costing method. 3) FIFO is recommended over moving average because it is simpler and more straightforward, allowing Expedia to easily develop a system to monitor raw material flows in line with their objective.

    Original Description:

    Original Title

    Costing and Pricing_02_Activity_1

    Copyright

    © © All Rights Reserved

    Available Formats

    DOCX, PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    1) Expedia Industries is the largest supplier of women's clothing in the US and wants to establish a costing procedure to monitor raw material inflows and outflows related to production. 2) The board members disagree on whether to use the FIFO or moving average costing method. 3) FIFO is recommended over moving average because it is simpler and more straightforward, allowing Expedia to easily develop a system to monitor raw material flows in line with their objective.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as docx, pdf, or txt
    164 views1 page

    Costing and Pricing - 02 - Activity - 1

    Uploaded by

    JERMAINE APRIL LAGURAS
    1) Expedia Industries is the largest supplier of women's clothing in the US and wants to establish a costing procedure to monitor raw material inflows and outflows related to production. 2) The board members disagree on whether to use the FIFO or moving average costing method. 3) FIFO is recommended over moving average because it is simpler and more straightforward, allowing Expedia to easily develop a system to monitor raw material flows in line with their objective.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as docx, pdf, or txt
    of 1

    BM2209

    Names Jermaine April D Laguras Section BA2101 Date

    P-M-I CHART

    Instructions: Read and analyze the scenario below. Write your answers in the spaces provided.
     In the Interesting box, write down how each costing method would contribute to achieving the
    main objective of Expedia Industries.
     In the My Decision box, write down your recommendation about the most effective costing
    approach to resolve the problem in the given scenario using one (1) between the two (2) costing
    methods being compared.

    Scenario: Expedia Industries


    Expedia Industries is the largest supplier and manufacturer of modern women’s clothing in the United
    States. The company's main objective is to establish a costing procedure that will monitor the inflow and
    outflow of their raw materials relative to their production of clothes. The company's board members
    have separate views on employing the FIFO costing method or the Moving Average costing method.
    According to most of them, their principal raw material, cotton, does not even have an expiration date,
    and any of the most commonly used costing methods can be useful in managing their inventories.

    Response 1: FIFO (First in, first out) Response 2: Moving Average

    Plus Minus Plus Minus


    (Advantages) (Disadvantages) (Advantages) (Disadvantages)
     Simple and  Cash outflows  It may be calculated  The data is always
    straightforward could rise as a for any time frame. changing since it is
    concept. result of tax constantly
    penalties.  For fere pricing recalculating after
     Calculating the long-term trends, it each transaction.
    precise cost of the  In times of can be really  It takes longer to
    inventory being hyperinflation, it helpful. respond to abrupt
    sold can save time may not be an price movements,
    and money. appropriate which frequently
    measure. occur during market
    reversal moments.
    Interesting Interesting
    FiFo approaches may significantly aid Expedia The moving average approach can help Expedia
    Industries in achieving their primary goal because Industries accomplish their objective since, as shown in
    they will find it easy to develop the same thing my advantages list, it can be quite helpful for
    that will monitor their inflow and outflow of row anticipating long-term trends.
    materials because it may be factors that posts
    confront.

    My Decision
    The Fifo approach should be used and applied by Expedia Industries, as I believe it will aid them more
    than the moving average does. Although both methods can assist them in accomplishing their main goal,

    I believe the Fifo technique will be more beneficial for them.

    02 Activity 1 *Property of STI


    Page 1 of 1

    You might also like