FIFO and LIFO
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 are more than three numbers and round to the nearest whole number.
In a separate three-page Word document (not including the title and reference page) explain the advantages and disadvantages of FIFO and LIFO inventory methods and evaluate the best inventory method is best for this scenario.
Submit the three-page Word document (not including the title and reference pages) and your separate Excel worksheet. Your paper must be formatted according to APA style as outlined in the approved APA style guide, and you must cite at least three scholarly sources in addition to the textbook.
Finkler, S. A., Purtell, R. M., Calabrese, T. D., & Smith, D. L. (2013). Financial management for public, health, and not-for-profit organizations (4th ed.).
Upper Saddle River, NJ: Pearson Prentice Hall.
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