Houle Limited reported the following summarized annual data at the end of 2018: *Based on an ending inventory of $420,000, using FIFO.The controller of the company is considering a switch from FIFO to average cost. He has determined that on an average cost basis, the ending inventory would have been $320,000.Instructions
a. Restate the summary information on an average cost basis.
b. If you were the management of this business, what would your reaction be to this proposed change?

Question

Houle Limited reported the following summarized annual data at the end of 2018:  *Based on an ending inventory of $420,000, using FIFO.The controller of the company is considering a switch from FIFO to average cost. He has determined that on an average cost basis, the ending inventory would have been $320,000.Instructions 
a. Restate the summary information on an average cost basis.
b. If you were the management of this business, what would your reaction be to this proposed change?

Quizplus · Accepted Answer

The Answer of Houle Limited reported the following summarized annual data at the end of 2018:  *Based on an ending inventory of $420,000, using FIFO.The controller of the company is considering a switch from FIFO to average cost. He has determined that on an average cost basis, the ending inventory would have been $320,000.Instructions 
a. Restate the summary information on an average cost basis.
b. If you were the management of this business, what would your reaction be to this proposed change?

Houle Limited Reported the Following Summarized Annual Data at the End