Mingan Company had the following activity for the first quarter of the year. They sell the product for $8.00 per unit and use a periodic inventory system.Required:
A) If management were paid a bonus based on net income, which cost flow assumption would they prefer? What would the gross margin and ending inventory be?
B) If Mingan wanted to minimize income taxes, which cost flow assumption would they prefer? What would the gross margin and ending inventory be?

Question

Mingan Company had the following activity for the first quarter of the year.  They sell the product for $8.00 per unit and use a periodic inventory system.Required:
A) If management were paid a bonus based on net income, which cost flow assumption would they prefer? What would the gross margin and ending inventory be? 
B) If Mingan wanted to minimize income taxes, which cost flow assumption would they prefer? What would the gross margin and ending inventory be?

Quizplus · Accepted Answer

The Answer of Mingan Company had the following activity for the first quarter of the year.  They sell the product for $8.00 per unit and use a periodic inventory system.Required:
A) If management were paid a bonus based on net income, which cost flow assumption would they prefer? What would the gross margin and ending inventory be? 
B) If Mingan wanted to minimize income taxes, which cost flow assumption would they prefer? What would the gross margin and ending inventory be?

Mingan Company Had the Following Activity for the First Quarter