The Following Information Comes from the 2011 American Greetings Corporation

question 85

Essay

The following information comes from the 2011 American Greetings Corporation (AG) Corporation annual report to shareholders:
Inventories included the following ($ in thousands): Inventories are valued at the lower of cost or market, with cost being determined by the LIFO method for 80% of inventories. The cost of all other inventories is determined primarily by the FIFO method. AG's cost of goods sold for 2011 was $682,368 thousand.
Required:
If AG used only FIFO for all of its inventories instead of its current policy, what would its cost of goods sold have been for 2011?

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Definitions:

Marginal Cost

The growth in complete costs associated with creating another unit of a good or service.

Total Revenue

The total amount of money received by a company from the sale of its goods or services.

Market Price

The current price at which a good or service can be bought or sold in a marketplace, determined by supply and demand.

Profit

The financial gain realized when the revenue from selling goods or services exceeds the cost of production.