Fifo And Lifo Analyze The Following Hospital Scenario

Question

Fifo And Lifoanalyze The Following Scenario The Hospital For Ordinary Analyze the following scenario: The hospital for ordinary surgery uses pharmaceuticals for its patients. It started the year on January 1, with an inventory of 1,000 doses of an antibiotic drug that cost $17 per dose. On January 2, it purchased another 300 doses for $21 each. From January 3 through June 30, it used 800 doses. On July 1, it bought 500 more doses at $23 each. From July 2 through the end of the year, it used 400 doses. What is the inventory value at the end of the year, assuming FIFO? What is the value assuming LIFO? Clearly label the calculations of the inventory amounts using Excel. Use formulas to calculate the FIFO and LIFO inventories and format the cells to insert a comma if there are more than three numbers and round to the nearest whole number. Explain the advantages and disadvantages of FIFO and LIFO inventory methods and evaluate which inventory method is best for this scenario. Submit to your instructor your two to three page Word document (not including the title and reference pages) and your Excel worksheet. Your paper should be formatted according to APA style as outlined in the approved APA style guide, and you must cite at least two scholarly sources in addition to the textbook.

Dr. Jack HW Helper · Accepted Answer

Introduction Effective inventory management is vital for healthcare organizations to ensure cost control, regulatory compliance, and optimal patient care. Among the various inventory valuation methods, FIFO (First-In, First-Out) and LIFO (Last-In, First-Out) are widely used. This paper analyzes a hospital’s pharmaceutical inventory scenario applying both methods, discusses their advantages and disadvantages, and recommends the most appropriate method for the specific context. Scenario Overview and Inventory Data The hospital began the year with an inventory of 1,000 doses of antibiotic drugs at $17 each. The following transactions occurred: - January 2: Purchase of 300 doses at $21 each - June 30: Usage of 800 doses - July 1: Purchase of 500 doses at $23 each - December 31: Usage of 400 doses Calculations using Excel formulas determine the remaining inventory and its value under FIFO and LIFO methods. FIFO Inventory Valuation FIFO assumes the oldest inventory items are used first. Initially, the hospital has 1,000 doses at $17. On January 2, it adds 300 doses at $21, increasing total inventory to 1,300 doses. Between January 3 and June 30, 800 doses are used: - First, 1,000 doses at $17 are used, covering the initial stock entirely. - The remaining 200 doses used (from 800 total used) must come from the next layer (the 300 doses at $21). Remaining inventory after June 30: - 100 doses at $21 (since 300 - 200 used), - Plus the 500 doses bought on July 1 at $23. Using Excel formulas, the ending inventory is calculated as the sum of the remaining layers: - 100 doses at $21 - 500 doses at $23 Total FIFO inventory value: $$ (100 \times \$21) + (500 \times \$23) = \$2,100 + \$11,500 = \$13,600 $$ This calculation can be implemented in Excel using cell formulas with proper formatting. LIFO Inventory Valuation LIFO assumes the most recent inventory is used first. After January 2 purchase, the last batch before usage is: - 300 doses at $21. - The account then proceeds based o

Fifo And Lifo Analyze The Following Hospital Scenario ✓ Solved

Fifo And Lifoanalyze The Following Scenario The Hospital For Ordinary

Sample Paper For Above instruction

Introduction

Scenario Overview and Inventory Data

FIFO Inventory Valuation

LIFO Inventory Valuation

Advantages and Disadvantages of FIFO and LIFO

Evaluation and Recommendation

References