Explain the advantages and disadvantages of fifo and lifo

Question

Analyze the following scenario: The Hospital for Ordinary Surgery uses pharmaceuticals for its patients. It started the year on January 1, with an inventory of 1,000 doses of an antibiotic drug that cost $17 per dose. On January 2, it purchased another 300 does for $21 each. From January 3 through June 30 it used 800 doses. On July 1, it bought 500 more doses at $23 each.

From July 2 through the end of the year it used 400 doses. What is the inventory value at the end of the year, assuming FIFO? What is the value assuming LIFO? Clearly label the calculations of the inventory amounts using Excel. Use formulas to calculate the FIFO and LIFO inventories and format the cells to insert a comma if there is more than three numbers and round to the nearest whole number.

Explain the advantages and disadvantages of FIFO and LIFO inventory methods and evaluate the best inventory method is best for this scenario.

Submit to your instructor your two to three page Word document (not including the title and reference pages) and your Excel worksheet.

Your paper should be formatted according to APA style and cite at least two scholarly sources.

Answer 1

Analyze your scenario and make an assessment of it as per requirement Examine the subsequent scenario: The Hospital for Ordinary Surgery utilizes pharmaceuticals for its patients. It started the year on January 1, through an inventory of 1,000 doses of an antibiotic drug that cost $17 per dose. On January 2, it bought one more 300 does for $21 each. From January 3 through June 30 it utilized 800 doses. On July 1, it bought 500 more doses at $23 each. From July 2 through the end of the year it utilized 400 doses. What is the inventory value at the finish of the year, assuming FIFO? What is the value assuming LIFO? Obviously label the estimates of the inventory amounts using Excel. Use formulas to estimate the FIFO and LIFO inventories and format the cells to insert a comma if there is more than 3 numbers and round to the nearest whole no. Clarify the benefits and drawbacks of FIFO and LIFO inventory techniques and calculate the best inventory procedure is best for this scenario.