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Paragon Electronics, Inc.: Inventory Cost Flow
Haskins, Mark E.; Parker, Monty Case C-1076 / Published March 12, 1986 / 6 pages.
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Product Overview

This case provides the basis for exploring issues pertaining to different cost flow assumptions and their working capital consequences. Students make various cost flow calculations for inventory and cost of goods sold using FIFO, LIFO, and the weighted-average techniques over a five-year time frame, during which inventory prices and quantities rise and fall. It quickly becomes apparent that accounting choices are related to significant managerial concerns and that certain accounting choices often induce certain managerial actions.




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  • Overview

    This case provides the basis for exploring issues pertaining to different cost flow assumptions and their working capital consequences. Students make various cost flow calculations for inventory and cost of goods sold using FIFO, LIFO, and the weighted-average techniques over a five-year time frame, during which inventory prices and quantities rise and fall. It quickly becomes apparent that accounting choices are related to significant managerial concerns and that certain accounting choices often induce certain managerial actions.

  • Learning Objectives