3. Oscar Geer, a mid-level product manager for Theresa's Shoes, thinks his company should switch from LIFO to FIFO. He says, "My bonus is based on net come. If we switch it will increase net income and increase my bonus. The company would be better off and so would I." Is he correct? Explain

Question

Baron Trevino

Business

17 November, 05:13

3. Oscar Geer, a mid-level product manager for Theresa's Shoes, thinks his company should switch from LIFO to FIFO. He says, "My bonus is based on net come. If we switch it will increase net income and increase my bonus. The company would be better off and so would I." Is he correct? Explain

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Answers (1)

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Francesca Park · Answer 1

Answer:NO, he his not correct

Explanation:

The fifo and lifo method are only a method of managing stock which means the earliest stock are issued out first in FIFO and last stock are issued out first in LIFO.

Either do not have a predictable advantage over the other in determining net income.