BIG Manufacturing Products Has Been Using FIFO Process Costing for Tracking

question 59

Essay

BIG Manufacturing Products has been using FIFO process costing for tracking the costs of its manufacturing activities. However, in recent months, the system has become somewhat bogged down with details. It seems that, when the company purchased Brown Electronics last year, its product lines increased six-fold. This has caused both the accountants and the suppliers of the information, the line managers, great difficulty in keeping the costs of each product line separate. Likewise, the estimation of the completion of ending work-in-process inventories and the associated costs has become very cumbersome. The chief financial officer of the company is looking for ways to improve the reporting system of product costs.
Required:
What can you recommend to improve the situation?

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Definitions:

Contrast

The state of being strikingly different from something else in juxtaposition or close association.

Stereotypes

Oversimplified generalizations about a group of people that often ignore individual differences.

Prejudice

Preconceived opinions or judgments about people or groups that are not based on reason or actual experience, often leading to discrimination.

Attitude

A learned tendency to consistently respond positively or negatively to people or events.