Question

Mannisto, Inc., uses the FIFO inventory cost flow assumption. In a year of rising costs and prices, the firm reported net income of $213,639 and average assets of $1,475,450. If Mannisto had used the LIFO cost flow assumption in the same year, its cost of goods sold would have been $38,070 more than under FIFO, and its average assets would have been $37,840 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%).)

SOLVE

ROI: FIFO%= ? LIFO%= ?