Mannisto, Inc., uses the FIFO inventory cost flow assumption. In a year of rising costs...
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Mannisto, Inc., uses the FIFO inventory cost flow assumption. In a year of rising costs and prices, the firm reported net income of $222,415 and average assets of $1,525,850. If Mannisto had used the LIFO cost flow assumption in the same year, its cost of goods sold would have been $38,730 more than under FIFO, and its average assets would have been $38,710 less than under FIFO. Required: a. Calculate the firm's ROI under each cost flow assumption (FIFO and LIFO). (Enter your answers as percentages rounded to 1 decimal place (i.e., 12.2%).)
Suppose that two years later costs and prices were falling. Under FIFO, net income and average assets were $268,495 and $1,850,720, respectively. If LIFO had been used through the years, inventory values would have been $45,690 less than under FIFO, and current year cost of goods sold would have been $16,440 less than under FIFO. Calculate the firm's ROI under each cost flow assumption (FIFO and LIFO). (Enter your answers as percentages rounded to 1 decimal place (i.e., 12.2%).)
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