Johnston Controls Began Operation in 2017 Using FIFO Inventory Methods

question 53

Multiple Choice

Johnston Controls began operation in 2017 using FIFO inventory methods. In 2018, management decided they should have chosen LIFO to more accurately portray financial position and performance. The beginning 2018 inventory using FIFO was $200,000. Under the LIFO method the beginning inventory would have been $240,000. The adjustment to inventory for the accounting principle change for 2017 would be ________.

• A) $0
• B) $20,000 debit
• C) $40,000 credit
• D) $40,000 debit

Analyze cost minimization and the determination of the optimal level of production.

Comprehend the difference between short-run and long-run costs in production.

Calculate total, variable, and fixed costs based on given data.

Understand the relationship between marginal cost and average total cost and how it influences production decisions.

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Definitions:

Assembly Time

The total time required to assemble a product from start to finish, impacting manufacturing efficiency and product delivery.

Measures Of Success

The criteria or metrics used to evaluate the effectiveness, performance, or impact of a project, program, or initiative.

Constraints

Limitations or restrictions that affect the process of decision-making or the implementation of projects and strategies.

Potential Solutions

Various options or strategies that could be implemented to solve a problem or challenge.