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Mingan Company Had the Following Activity for the First Quarter

Question 61

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Mingan Company had the following activity for the first quarter of the year. 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? 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?

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A) Because prices are falling Average Co...

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