In Millions 2005 2004
Finished Products 7,224 7,799
Raw material & work in process, supplies 4,056 3,968
Total inventories at FIFO 11,280 11,767
Less LIFO adjusted (1,009) (1,001)
total inventories 10,271 10,766
Req. 1. Given the amount of Ford LIFO reserve at the end of 2005 are cost rising or falling in this industry?
2. The total cost of goods sold reported by Ford for 2005 was 144,944 million. Using the COGS equation and the LIFO balance above determine the cost of inventory acquired (purchase) during 2005.
3. If Ford had used FIFO its cost of goods sold would have been 144,952 for 2005 (under LIFO it was 144,944 million). Calculate the inventory turnover ratio and days to sell under LIFO and FIFO, and comment on the significance of the inventory costing methods to these analyses of Ford inventory.