MERRIMACK TRACTORS AND MOWERS, INC.: LIFO or FIFO?

style Click to edit Master subtitle PRESENTED BY:DINMAN PRATAP NARAYAN ROLL NO:- 40013

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INTRODUCTION
Merrimack was a major regional manufacturer

and seller of large commercial grass mowers in USA. manufactured and assembled in a workshop and factory in Nashua.

Originally, Merrimack mowers were

Later it closes its manufacturing unit and

started to buy manufactured tractors and machine from china to save cost of production, to make huge profits and to fight its competitors. 4/14/12

Problem and Analysis

By 2008 things started to change in china.

Due to Economic development and activities like 2008 Beijing Olympic Games had increased wages and labor costs in china. strengthening value of Chinese currency compared with the U.S. Dollar.

There was increase in cost due to

Rising oil prices had also increased the cost

of shipping finished tractors and machines to the United States.

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Possible Solutions
Continuing with LIFO concept. Moving to FIFO from 2008

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Conclusion
After analyzing inventory using LIFO and FIFO

method And preparing income statement we come to a conclusion that the company should opt for FIFO method of inventory accounting as its making a huge profit as compare to LIFO method.

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