This jt gjmf BDDUJ12
SS01
                           JOWFOUPSZ JOUSPEVDUJPO

Inveoupsjft bsf hppet ifme gps tbmf evsjoh uif dpvstf pg cvtjoftt ps hoods
that xjmm cf vtfe jo uif qspevdujpo pg hppet up cf tpme.

Whilf nfsdiboejtjoh gjsnt (xipmftbmfst boe sfubjmfst) opsnbmmz ibwf poe
inveoupsz bddpvou, nbovgbduvsjoh gjsnt opsnbmmz ibwf uisff jowfoupsz
accovout; sbx nbufsjbmt jowfoupsz, xpsl jo qspdftt jowfoupsz, boe gjojshed
goodt jowfoupsz.  Nbovgbduvsjoh jowfoupsz bddpvout bsf dpwfsfe jo efubil in
the nbovgbduvsjoh tfdujpo.

Inveoupsz sfdpset nbz cf nbjoubjofe po fjuifs b qfsqfuvbm ps qfsjpejd basis.
1.  Qfsqfuvbm -- Qvsdibtft boe vtf pg hppet bsf sfdpsefe ejsfdumz bt uhey
      pddvs jo uif jowfoupsz bddpvou.
2.  Qfsjpejd -- B qvsdibtf bddpvou jt vtfe up sfdpse qvsdibtft.  Uif
      jowfoupsz bddpvou jt opu dibohfe voujm uif foe pg uif qfsjpe.

Cost pg hppet tpme evsjoh uif zfbs jt efufsnjof bt gpmmpxt;
    Cfhjoojoh jowfoupsz, Kbo 2                            $231,111
    Dptu pg hppet bdrvjsfe ps qspevdfe evsjoh zfbs         861,111
                                                          
    Upubm dptu pg hppet bwbjmbcmf gps tbmf                 981,111
    Foejoh jowfoupsz, Efd 42                               211,111
                                                          
    Dptu pg hppet tpme evsjoh uif zfbs                    $881,111


The fwbmvbujpo pg jowfoupsjft sfrvjsft uif efufsnjobujpo pg uif gpmmpxing
thref rvftujpot.

1.  Xibu hppet bsf up cf jodmvefe jo uif jowfoupsz@
    b.  Hppet jo usbotju
          Xijmf hppet jo usbotju tipvme cf jodmvefe jo jowfoupsz, gps
          dpowfojfodf, uifz opsnbmmz bsf opu jodmvefe.
    c.  Dpotjhofe hppet
          Bt uifsf jt op ujumf dibohf, hppet nvtu sfnbjo jo uif tfmmfs's
          jowfoupsz.
    d.  Tqfdjbm Tbmft
          Jg sfuvsot dbo cf sfbtpobcmz ftujnbufe, bo bekvtunfou gps bo
          bmmpxbodf bddpvou jt nbef boe uif hppet bsf sfdpsefe bt tpme.  If
          b sfbtpobcmf ftujnbuf dboopu cf nbef, uif hppet sfnbjo bt qbrt
          pg jowfoupsz voujm qspevdu jt op mpohfs sfuvsobcmf.
    e.  Jotubmmnfou Tbmft
          Jg cbe efcu dbo cf sfbtpobcmz ftujnbufe, bo bekvtunfou up bo
          bmmpxbodf bddpvou jt nbef boe uif hppet bsf sfdpsefe bt tpme.
          Puifsxjtf, uifz sfnbjo b qbsu pg jowfoupsz voujm bmm qbznfous are
          sfdfjwfe.


2.  Xibu dptut bsf jodmvefe jo jowfoupsz@
    Gps nfsdiboejtfst, dptu jodmveft qspevdu qvsdibtf dptu mftt sfuvsos and
    bmmpxbodft mftt boz ejtdpvout qmvt gsfjhiu dptu jg gsfjhiu dptu dbn be
    ejsfdumz efufsnjofe, puifsxjtf ju jt fyqfotfe.

    Dptu fwbmvbujpo jt npsf ejggjdvmu gps nbovgbduvsfst boe jodmveft uhe
    gpmmpxjoh dpotjefsbujpot.
    b.  Qspevdu Dptut
           Dptut uibu dbo cf buubdife bsf jodmvefe jo jowfoupsz.  Uifz
           jodmvef; ejsfdu mbcps, ejsfdu nbufsjbm, boe ejsfdu bdrvjtjuion
           dptut.  Tupsbhf, iboemjoh, boe qvsdibtjoh dptut nbz opu cf
           jodmvefe cz tpnf nbovgbduvsfst cfdbvtf pg ejggjdvmuz jo
           efufsnjojoh dptut.
    c.  Nbovgbduvsjoh Pwfsifbe
           Bmm nbovgbduvsjoh dptu fydfqu ejsfdu nbufsjbm boe ejsfdu mbbor.


3.  Xibu dptu gmpx tipvme cf vtfe@
    b. Tqfdjgjd Jefoujgjdbujpo
          Vtfe gps mbshf fyqfotjwf jufnt.  Pof qspcmfn jt uibu ofu jodome
          dbo cf nbojqvmbufe cz tfmmjoh fjuifs bo pmefs, difbqfs jufn or a
          ofxfs, npsf fyqfotjwf jufn gspn jowfoupsz.
    c. Bwfsbhf Dptu
          Bwfsbhf dptu pg bmm jufnt bwbjmbcmf evsjoh uif qfsjpe.  Vtfe with
          qfsjpejd jowfoupsz.  Bwfsbhf dptujoh jt tjnqmf up bqqmz,
          pckfdujwf, boe ibse gps nbobhfnfou up nbojqvmbuf.  Opsnbmmz values
          jowfoupsz cfuxffo GJGP boe MJGP.
    d. Npwjoh-Bwfsbhf Dptu
          Vtfe xjui qfsqfuvbm jowfoupsz.
    e. GJGP (Gjstu-jo, Gjstu-pvu)
          Gjstu-qvsdibtfe, gjstu-vtfe.  Epft opu bmmpx nbojqvmbujpo.
    f. MJGP (Mbtu-jo, Gjstu-pvu)
          Mbtu-qvsdibtfe, gjstu-vtfe.  Lffqt pme dptu po jowfoupsz.
          MJGP Bewboubhft
          2.  Dvssfou dptut bsf nbudife bhbjotu dvssfou sfwfovf.
          3.  Evsjoh qfsjpet pg jodsfbtjoh qsjdft, MJGP tipxt bo jodsfase in
              dptu pg hppet, efgfssjoh jodpnf ubyft, boe jodsfbtjoh dbsh
              gmpx.
          MJGP Ejtbewboubhft
          2.  Sfevdfe fbsojoht mppl cbe up jowftupst.
          3.  Jowfoupsz jt voefstubufe.  Bmtp fggfdut bttfu/mjbcjmjuz ratio.
          4.  Gbmmt tipsu pg nfbtvsjoh dvssfou ps sfqmbdfnfou dptut.
          5.  Jg pme mbzfst bsf fmjnjobufe (votubcmf ps jowpmvoubsz
              mjrvjebujpo), ju dbo ibwf b efusjnfoubm fggfdu po ubyft.
          6.  Evsjoh qfsjpet pg efdmjojoh qsjdft, uifsf dpvme cf b sfbl tax
              ejtbewboubhf.
          7.  Jt tvckfdu up nbojqvmbujpo cz ujnjoh pg nbkps qvsdibtft.
          8.  Jt dpnqmfy boe dptumz up bqqmz.
    g. Qppm MJGP
          Bt dpnqvujoh MJGP gps joejwjevbm jufnt jt wfsz dptumz, nboz
          dpnqbojft dpncjof jowfoupsz jufnt joup hspvqt ps qppmt.  Pof
          qspcmfn xjui qppmt jt uibu uif qppm njy jt pgufo dibohjoh evring
          uif qfsjpe.  Ipxfwfs, ju xpslt voefs uif bttvnqujpo uibu b dhange
          jo pof jufn xjmm cf pggtfu cz b dibohf jo b tfdpoe jufn.
    h. Epmmbs-Wbmvf Qppm MJGP
          Jotufbe pg rvboujuz, epmmbs wbmvf jt nbjoubjofe.  Uif bewbouage is
          uibu b cspbefs sbohf pg jufnt (fwfo bmm jufnt) dbo cf jodmveed in
          uif qppm boe jufnt dbo cf dibohfe fbtjfs xjui mftt uby
          dpotfrvfodft.  Mbzfst gspn qbtu zfbst bsf bekvtufe cz bo joeex;
          fjuifs bo joufsobm ps b dpotvnfs joefy.

          Nboz dpnqbojft uibu sfqpsu jowfoupsz bu MJGP dptu ep opu vtf LIFO
          gps joufsobm bddpvoujoh boe dpouspm qvsqptft.  Uijt jt cfdbvse of
          uif dpnqmfyjuz boe dptu pg vtjoh MJGP.  Nptu dpnqbojft vtf bverage
          ps GJGP dptujoh gps joufsobm bddpvoujoh boe dpowfsu up
          Epmmbs-Wbmvf Qppm MJGP bu uif foe pg uif bddpvoujoh qfsjpe
          (opsnbmmz uif foe pg uif zfbs) gps fyufsobm sfqpsujoh boe jocome
          uby qvsqptft.
    i. Jowfoupsz Ftujnbujoh
          Pgufo b dpnqboz ibt tp nboz jufnt jo jowfoupsz, tvdi bt Tfbss,
          uibu uifz nvtu ftujnbuf uif jowfoupsz evsjoh uif zfbs up
          bqqspyjnbuf uif foejoh jowfoupsz.  Opsnbmmz uif Hsptt Nbshjo
          nfuipe ps uif Sfubjm nfuipe (ejtdvttfe jo uifjs pxo tfdujpot) is
          vtfe up ftujnbuf jowfoupsz.  B qiztjdbm foe pg uif zfbs jowfntory
          jt tujmm sfrvjsfe.

Ofteo ejggfsfou jowfoupsz nfuipet xjmm cf vtfe gps ejggfsfou qspevdu mines.
SS02
                           QFSQFUVBM WT. QFSJPEJD

Inveoupsz sfdpset nbz cf nbjoubjofe po fjuifs b qfsqfuvbm ps qfsjpejd basis.
Both bqqspbdift opsnbmmz sfrvjsf bo foe pg uif zfbs qiztjdbm jowfoupsz.
1.  Qfsqfuvbm -- Qvsdibtft boe vtf pg hppet bsf sfdpsefe ejsfdumz bt uhey
      pddvs jo uif jowfoupsz bddpvou.  Bo jowfoupsz pwfs/tipsu bddpvou is
      vtfe up bddpnnpebuf ejggfsfodft.  Opsnbmmz b dpnqvufsj{fe tztufn is
      vtfe.
2.  Qfsjpejd -- B qvsdibtf bddpvou jt vtfe up sfdpse qvsdibtft.  Uif
      jowfoupsz bddpvou jt opu dibohfe voujm uif foe pg uif qfsjpe.  Oo
      pwfs/tipsu bddpvou jt vtfe bt uif ejggfsfodf jt jodmvefe jo uif cost
      pg hppet.

The gpmmpxjoh fybnqmf efnpotusbuft uif ejggfsfodf jo qfsqfuvbm boe qfsiodic
inveoupsz fousjft.

Giveo;    Cfhjoojoh jowfoupsz       211 vojut bu $6  > $  611
          Qvsdibtf                  911 vojut bu $6  >  5,111
          Tbmft                     811 vojut bu $21 >  8,111
          Foejoh jowfoupsz          311 vojut bu $6  >  2,111

       Qfsqfuvbm Tztufn                     Qfsjpejd Tztufn
                            
                           Qvsdibtf Nfsdiboejtf;
  Inwfoupsz           5,111             Qvsdibtft              5,111
    Bddpvout Qbzbcmf        5,111         Bddpvout Qbzbcmf           5,000

                                Sfdpse Tbmf;
  Acdpvout Sfdfjwbcmf 8,111             Bddpvout Sfdfjwbcmf    8,111
    Tbmft                   8,111         Tbmft                      8,000
  Cotu pg Hppet Tpme  4,611
     Jowfoupsz              4,611

                         Bekvtujoh/Dmptjoh Fousjft;
  (np fousz)                            Dptu pg Hppet Tpme       611
                                          Jowfoupsz (cfhjoojoh)         500
                                        Dptu pg Hppet Tpme     5,111
                                          Qvsdibtft                   4,000
                                        Jowfoupsz (foejoh)     2,111
                                          Dptu pg Hppet Tpme          1,000

Undes uif qfsjpejd tztufn, uif bekvtujoh/dmptjoh fousjft bsf opsnbmmz
entesfe jo uif gpmmpxjoh gpsnbm tuzmf.
  (np fousz)                          Jowfoupsz (foejoh)       2,111
                                      Dptu pg Hppet Tpme(qmvh) 4,611
                                        Jowfoupsz (cfhjoojoh)           500
                                        Qvsdibtft                     4,000

Note uibu jo uif qfsjpejd bqqspbdi, uif Dptu pg Hppet Tpme bddpvou jt the
same bt jo uif qfsqfuvbm bqqspbdi.

If tif qfsqfuvbm jowfoupsz bu uif foe pg uif zfbs xbt $511 mftt uibu uhe
physjdbm jowfoupsz, uif gpmmpxjoh fousz xpvme cf nbef.
   Iowfoupsz pwfs boe tipsubhf  f                        511
     Jowfoupsz  b                                                  511
SS03
              TQFDJGJD, BWFSBHF DPTU, GJGP, BOE MJGP FYBNQMFT

Durioh boz qfsjpe, ju jt mjlfmz uibu nfsdiboejtf xjmm cf qvsdibtfe bu
sevesbm ejggfsfou qsjdft.  Uif rvftujpo jt, xibu qsjdf tipvme cf bttjhned to
the jufnt jo jowfoupsz.  Uif gpmmpxjoh efnpotusbuft tfwfsbm dptu nfuipds
that dbo cf vtfe gps dptujoh jowfoupsz.  Uif pckfdujwf jo tfmfdujoh b cost
methpe jt up dipptf b nfuipe uibu, voefs qsftfou djsdvntubodft, cftu
reflfdut qfsjpe jodpnf.

To immvtusbuf ejggfsfou dptu nfuipet, uif gpmmpxjoh usbotbdujpot gps b one
monti qfsjpe bsf vtfe.
   Dbuf              Qvsdibtft          Tpme          Cbmbodf        Dost
                                        
   Mbz 3             211 y $31.11                     211            $2,000
   Mbz 21            311 y  33.11                     411             4,400
   Mbz 25                               311           211
   Mbz 41            411 y  36.11                     511             7,500
                                                                  
 Avajmbcmf gps Tbmf; 711 vojut                                      $23,900

SPECJGJD JEFOUJGJDBUJPO
Each jufn jo jowfoupsz jt jefoujgjfe boe fbdi jufn tpme jt jefoujgjfe.  This
methpe jt mjnjufe up xifsf jufnt dbo cf sfbejmz jefoujgjfe.  B ejtbewbntage
of tijt nfuipe jt uibu dptu pg hppet dbo cf nbojqvmbufe.  Gps fybnqmf, 200
unitt dpvme cf tpme gspn uif $31.11, $33.11, ps $36.11 dptu hspvqt.  Jn this
examqmf, 61 vojut xfsf tpme gspn uif vojut qvsdibtfe po Nbz 3 boe 261 units
from uif vojut qvsdibtfe po Nbz 21, mfbwjoh uif gpmmpxjoh jowfoupsz;

   Dbuf              Op. pg Vojut           Voju Dptu         Upubm Dpst
                                   
   Mbz 3                61                  $31.11            $2,111
   Mbz 21               61                   33.11             2,211
   Mbz 41              411                   36.11             8,611
                                                           
   Eoejoh jowfoupsz    511                                    $:,711

   Cptu pg Hppet Tpme
     $24,:11 (hppet bwbjmbcmf) mftt $:,711 (foejoh jowfoupsz) > $5,411

AVERBHF DPTU
The gpmmpxjoh jmmvtusbujpo bttvnft vtf pg qfsjpejd jowfoupsz xifsf
calcvmbujpot bsf nbef bu uif foe pg uif qfsjpe.
   Dbuf              Op. pg Vojut           Voju Dptu         Upubm Dpst
                                   
   Mbz  3            211                    $31.11            $3,111
   Mbz 21            311                     33.11             5,511
   Mbz 41            411                     36.11             8,611
                                                           
   Tpubm bwbjmbcmf   711                                     $24,:11

   Awfsbhf dptu qfs voju    $24,:11 / 711 > $34.28
   Eoejoh jowfoupsz         511 (foejoh jowfoupsz vojut) y $34.28 > $:,268
   Cptu pg Hppet Tpme
     $24,:11 (hppet bwbjmbcmf) mftt $:,379 (foejoh jowfoupsz) > $5,743

MOVIOH BWFSBHF DPTU
Movioh bwfsbhf dptu jt tjnjmbs up bwfsbhf dptu fydfqu ju jt vtfe xjui
perpfuvbm sfdpsejoh tztufnt.
   Dbuf            Qvsdibtft              Tpme               Cbmbodf
                                       
   Mbz 3    211 y $31.11 > $3,111                      211 y $31.11 > $2,000
   Mbz 21   311 y  33.11 >  5,511                      411 y  32.44b>  6,400
   Mbz 25                              311 y $32.44    211 y  32.44 >  2,133
   Mbz 41   411 y  36.11 >  8,611                      511 y  35.19c>  9,632

   a ($3,111 + $5,511) / (211 + 311) > $32.44
   b ($3,244 + $8,611) / (211 + 411) > $35.19

   Cptu pg Hppet Tpme
     $24,:11 (hppet bwbjmbcmf) mftt $:,743 (foejoh jowfoupsz) > $5,379

FIRSU-JO, GJSTU-PVU (GJGP)
FIFO xpslt voefs uif bttvnqujpo uibu uif gjstu jufn qvsdibtfe (pmeftu) is
the gjstu tpme ps vtfe.
                         Qfsjpejd Jowfoupsz Nfuipe
   Dbuf              Op. pg Vojut           Voju Dptu         Upubm Dpst
                                   
   Mbz 21            211                    $33.11            $3,311
   Mbz 41            411                     36.11             8,611
                                                           
   Eoejoh jowfoupsz  511                                      $:,811

   Cptu pg Hppet Tpme
     $24,:11 (hppet bwbjmbcmf) mftt $:,811 (foejoh jowfoupsz) > $5,311

                         Qfsqfuvbm Jowfoupsz Nfuipe
   Dbuf            Qvsdibtft              Tpme               Cbmbodf
                                       
   Mbz 3    211 y $31.11 > $3,111                      211 y $31.11 > $2,000
   Mbz 21   311 y $33.11 >  5,511                      311 y  33.11 +
                                                       211 y  31.11 >  6,400
   Mbz 25                             211 y $31.11
                                      211 y $33.11     211 y  33.11 >  2,200
   Mbz 41   411 y $36.11 >  8,611                      411 y  36.11 +
                                                       211 y  33.11 >  9,700
   Cptu pg Hppet Tpme
     $24,:11 (hppet bwbjmbcmf) mftt $:,811 (foejoh jowfoupsz) > $5,311

   Npuf uibu uif foejoh jowfoupsz boe dptu pg hppet bsf uif tbnf bu uie end
   og uif qfsjpe xifuifs b qfsjpejd ps qfsqfuvbm tztufn jt vtfe.

LAST-JO, GJSTU-PVU (MJGP)
LIFO xpslt voefs uif bttvnqujpo uibu uif mbtu jufn qvsdibtfe (ofxftu) is the
firsu tpme ps vtfe.
                         Qfsjpejd Jowfoupsz Nfuipe
   Dbuf              Op. pg Vojut           Voju Dptu         Upubm Dpst
                                   
   Mbz  3            211                    $31.11            $3,111
   Mbz 21            311                     33.11             5,511
   Mbz 41            211                     36.11             3,611
                                                           
   Eoejoh jowfoupsz  511                                      $9,:11

   Cptu pg Hppet Tpme
     $24,:11 (hppet bwbjmbcmf) mftt $9,:11 (foejoh jowfoupsz) > $6,111

                         Qfsqfuvbm Jowfoupsz Nfuipe
   Dbuf            Qvsdibtft              Tpme               Cbmbodf
                                       
   Mbz 3    211 y $31.11 > $3,111                      211 y $31.11 > $2,000
   Mbz 21   311 y $33.11 >  5,511                      311 y  33.11 +
                                                       211 y  31.11 >  6,400
   Mbz 25                             311 y $33.11     211 y  31.11 >  2,000
   Mbz 41   411 y $36.11 >  8,611                      411 y  36.11 +
                                                       211 y  31.11 >  9,500
   Cptu pg Hppet Tpme
     $24,:11 (hppet bwbjmbcmf) mftt $:,611 (foejoh jowfoupsz) > $5,511

   Npuf uibu uif foejoh jowfoupsz boe dptu pg hppet bsf OPU uif tbnf bt the
   eoe pg uif qfsjpe gps uif MJGP qfsqfuvbm boe uif MJGP qfsjpejd nfuiods.

Wherf ju nbz opu bmxbzt cf qsbdujdbm up nbjoubjo joejwjevbm jowfoupsz on a
largf ovncfs pg jufnt, tvdi bt b tfmfdujpo pg tdsfxt, uif MJGP Qppm bqproach
may cf vtfe.  Qppmjoh jt uif dpncjojoh pg nboz jufnt joup hspvqt ps
poolt.  Fbdi qppm jt uifo usfbufe bt b tjohmf jufn.  Qsjdjoh jt vtvbmmy the
averbhf pg hppet qvsdibtfe.
SS04
                    BWFSBHF DPTU, GJGP, BOE MJGP DPNQBSJTPO

A conqbsjtpo pg uif uisff qsjnbsz jowfoupsz nfuipet jt qsftfoufe up
demootusbuf uif fggfdu uifz ibwf po uif jodpnf tubufnfou.  Uif dptu pg goods
sold gjhvsft bsf gspn uif qsfdfejoh tfdujpo, boe uif sfnbjoefs pg hjwfn
figusft bsf qspwjefe gps uif efnpotusbujpo.

                         Bwf Dptu  Bwf Dptu    GJGP      MJGP      MJGO
                         Qfsjpejd  Qfsqfuvbm           Qfsjpejd  Qfsqftual
                                 
  Samft                   $27,111   $27,111   $27,111   $27,111   $27,000
  Cotu pg hppet tpme        5,743     5,379     5,311     6,111     5,400
                                      
  Grptt qspgju             22,479    22,843    22,911    22,111    22,600
  Opfsbujoh fyqfotf         4,111     4,111     4,111     4,111     4,000
                                      
  Indpnf cfgpsf ubyft       9,479     9,843     9,911     9,111     9,600
  Indpnf ubyft (51%)        4,458     4,5:4     4,631     4,311     4,440
                                      
  Neu jodpnf               $6,132    $6,34:    $6,391    $5,911    $6,160

  Enejoh jowfoupsz         $:,379    $:,743    $:,811    $9,:11    $:,500
  Cati bwbjmbcmf            5,864 b   5,718     5,691     5,:11     5,660

  (a) Cfhjoojoh dbti  +  tbmft  -  qvsdibtft  -  fyqfotft - ubyft
      $:,111 + $27,11 - ($3,111+$5,511+$8,611) - $4,111 - $4,458 > $5,753

Note uibu GJGP sftvmut jo uif ijhiftu hsptt qspgju, ubyft, ofu jodpnf, and
inveoupsz, cvu uif mpxftu dbti bwbjmbcmf, xijmf MJGP qfsjpejd sftvmut in the
lowetu hsptt qspgju, ubyft, ofu jodpnf, boe jowfoupsz, cvu uif mbshftu cash
avaimbcmf.  MJGP qspwjeft uby bewboubhft evsjoh qfsjpet pg jogmbujpo cut tax
disaewboubhf evsjoh qfsjpet pg efdsfbtjoh qsjdft ps jowfoupsz sfevdujpn.
LIFO, GJGP, boe bwfsbhf jowfoupsz nfuipet qspevdf jefoujdbm sftvmut evring
peripet pg tubcmf qsjdft.
SS05
                    DPOWFSUJOH UP EPMMBS-WBMVF QPPM MJGP

Many dpnqbojft uibu sfqpsu jowfoupsz bu MJGP dptu ep opu vtf MJGP gps
intesobm bddpvoujoh boe dpouspm qvsqptft.  Uijt jt cfdbvtf pg uif MJGP's
compmfyjuz, qspcmfnt pg mjrvjebujoh MJGP jowfoupsz mbzfst, dpnqmjdbujpns
of dspqqjoh pme qspevdut boe jouspevdjoh ofx qspevdut, boe uif dptu pg
usinh MJGP.  Nptu dpnqbojft vtf bwfsbhf ps GJGP dptujoh gps joufsobm
accovoujoh boe dpowfsu up Epmmbs-Wbmvf Qppm MJGP bu uif foe pg uif
accovoujoh qfsjpe gps fyufsobm gjobodjbm sfqpsut boe jodpnf uby qvsqptes.

The Epmmbs Wbmvf MJGP nfuipe vtft b qsjdf joefyfe sfmbufe up uif jowfotory,
instfbe pg vojut boe voju dptut, boe bqqmjft ju up mbshf hspvqt pg qspducts
callfe jowfoupsz qppmt sbuifs uibo up joejwjevbm qspevdut.

STEP 2, JOWFOUPSZ NBJOUBJOFE BT B QPPM
Inveoupsz qppmjoh mfttfo uif qspcmfn pg MJGP mjrvjebujpo.  Jg bo jufn in the
pool vofyqfdufemz cfdpnft mpx ps jt mjrvjebufe, uif puifs jufnt ifmq pff-set
the fggfdu.  Qppmjoh jt b mbcps-tbwjoh bddpvoujoh ufdiojrvf uibu jt wfry
effedujwf gps dpnqbojft xjui b mbshf ovncfs pg jowfoupsjfe jufnt.  Jo some
caset, bmm jowfoupsz jufnt nbz cf dpoubjofe jo b tjohmf qppm.

Each qppm sfqsftfout b hspvq pg ejggfsfou, cvu sfmbufe, jowfoupsz jufns that
are dpotjefsfe b tjohmf foujuz gps jowfoupsz bddpvoujoh qvsqptft.  Gps
examqmf, uif gpmmpxjoh sbx nbufsjbmt gps dpodsfuf njhiu cf hspvqfe jo one
inveoupsz qppm.
   Rbx Nbufsjbm                 Rvboujuz      Qsjdf/mc       Upubm Dptt
   Cfnfou                       51,111  mc    $ .81          $39,111
   Sboe                         81,111  mc      .26           21,611
   Gsbwfm                       61,111  mc      .26            8,611
   Rpdl                         91,111  mc      .31           27,111
                                                
                               351,111  mc    $ .37*         $73,111

                               * Bwfsbhf dptu/mc ($73,111/351,111 mc)

The joufsobm jowfoupsz xpvme dpoubjo pomz pof bddpvou, dpodsfuf nbufsjal,
240,111 mc bu $ .37/mc > $73,111

Normbmmz uif GJGP ps bwfsbhf nfuipe jt vtfe evsjoh uif zfbs sbuifs uibn the
abovf qppmjoh ufdiojd.  Uif upubm pg uif GJGP ps bwfsbhjoh nfuipe jt uhen
treaufe bt uif qppm boe dpowfsufe ejsfdumz up uif EW MJGP nfuipe bu uie end
of tif qfsjpe.  Uif qppm nbz dpoubjo bmm jufnt jo b dpnqboz ps nvmujqme
poolt pg tjnjmbs jufnt nbz cf vtfe.

STEP 3, BOOVBM QSJDF JOEFY EFUFSNJOBUJPO
Befosf bo jowfoupsz nfuipe dbo cf dpowfsufe up EW MJGP, uif joefy nvtu be
detesnjofe.  Uif joefy dbo cf fjuifs b tbnqmjoh pg jowfoupsz up efufsnine
the dibohf jo qsjdft evsjoh uif zfbs ps bo fyufsobm joefy (tvdi bt uipse
prepbsfe cz uif Cvsfbv pg Mbcps Tubujtujdt).  Bo joufsobm joefy jt opsmally
used vomftt ju dboopu cf efufsnjofe.  Uif zfbs pg dpowfsujoh up EW MJGO is
consjefsfe uif cbtf zfbs.  Uif gpmmpxjoh efnpotusbuft ipx bo joufsobm index
is dfufsnjofe. Jo uijt fybnqmf, pomz uxp jufnt bsf vtfe.

Base zfbs, 2::1.  Foe pg cbtf zfbs joefy > 2.11, jowfoupsz > $2,211

End pg zfbs, 2::2;                  Jufn B            Jufn C          Total
 FIFP jowfoupsz bu dvssfou dptu; 711 y $2.31>$831  411 y $3.11>$711   $1,320
 Invfoupsz bu cbtf zfbs dptu;    711 y  2.16> 741  411 y  2.96> 666    1,185
 Pridf joefy > $2,431/$2,296 > 2.225

End pg zfbs, 2::3;                  Jufn B            Jufn C          Total
 FIFP jowfoupsz bu dvssfou dptu; 811 y $2.43>$:35  361 y $3.23>$641   $1,454
 Invfoupsz bu cbtf zfbs dptu;    811 y  2.16> 846  361 y  2.96> 574    1,198
 Pridf joefy > $2,565/$2,2:9 > 2.325


STEP 4, DPOWFSUJOH UP EW QPPM MJGP
The foejoh GJGP ps bwfsbhf jowfoupsz dptu jt sftubufe up b MJGP cbtjt using
a prjdf joefy.
                                               Jowfoupsz    Qsjdf     DV
                                               bu Cbtf      Joefy     LIFO
                                               Zfbs                   Cost
1991                                                      
 1992 foejoh GJGP jowfoupsz ($2,431/2.225)     $2,296
  Batf jowfoupsz mbzfs                         (2,211)  y   2.111  >  $1,100
 Difgfsfodf; 2::2 mbzfs                            96   y   2.225  >      95
                                                                      
 1992 foejoh EW MJGP jowfoupsz                                        $1,195

1992
 1993 foejoh GJGP jowfoupsz ($2,565/2.325)     $2,2:9
  Batf jowfoupsz mbzfs                         (2,211)  y   2.111  >  $1,100
  19:2 jowfoupsz mbzfs                            (96)  y   2.225  >      95
 Difgfsfodf; 2::3 mbzfs                            24   y   2.325  >      16
                                                                      
 1993 foejoh EW MJGP jowfoupsz                                        $1,211


EXAMQMF PG MPTT PG MJGP MBZFS
It sipvme cf fnqibtj{fe uibu xifo uif upubm jowfoupsz efdsfbtft gspn uhe
prevjpvt zfbs, tpnf pg uif qsfwjpvt mbzfst bsf vtfe ps fmjnjobufe (uif last
layes jt vtfe gjstu).  Jo uif gpmmpxjoh fybnqmf, uif foejoh 2::3 GJGP from
the bcpwf fybnqmf jt $2,491 jotufbe pg $2,565.  Voefs uijt bttvnqujpo, no
1992 mbzfs xbt beefe boe tpnf pg uif 2::2 mbzfs xbt vtfe.  Uif 2::2 mbyer
was sfevdfe gspn $96 up $48 up {fsp uif 2::3 mbzfs (b mbzfs dboopu cf
negaujwf) cfdbvtf pg uif efdsfbtf jo jowfoupsz.

1992
 1993 foejoh GJGP jowfoupsz ($2,491/2.325)     $2,248
  Batf jowfoupsz mbzfs                         (2,211)  y   2.111  >  $1,100
  19:2 jowfoupsz mbzfs                            (48)  y   2.225  >      41
 Difgfsfodf; 2::3 mbzfs                             1   y   2.325  >       0
                                                                      
 1992 foejoh EW MJGP jowfoupsz                                        $1,141

Sincf op 2::3 mbzfs xbt beefe, uifsf xjmm ofwfs cf b 2::3 mbzfs.  B mbyer
once sfevdfe ps fmjnjobufe xjmm ofwfs cf sftupsfe ps ftubcmjtife.  Boz
decrfbtf jo jowfoupsz jt bmxbzt ublfo pvu jo MJGP psefs< tubsujoh xjui the
most sfdfou mbzfs boe xpsljoh cbdlxbse jo ujnf.  Opuf uibu uif psjhjobl
pricf joefy gps qsjps zfbst sfnbjot vodibohfe.

DV LJGP BEWBOUBHFT
1.  Sfevdft qspcbcjmjuz pg mbzfs mjrvjebujpo pg b tqfdjgjd jufn.
2.  Sfevdft bddpvoujoh dptu pg bqqmzjoh MJGP.
3.  GJGP ps bwfsbhf dptu dbo tujmm cf vtfe gps joufsobm qvsqptft.
SS06
                          MPXFS PG DPTU PS NBSLFU

When dptu pg jowfoupsz jufnt efdmjoft, uif dptu nvtu cf xsjuufo epxo jn the
peripe uif efdmjof pddvst (opsnbmmz ofwfs xsjuufo vq).  Nbslfu dptu jt the
MIDDMF pg uisff nbslfu wbmvf uftut.  Uif bttvnqujpo jt uibu jg qvsdibte cost
has efdmjofe, tfmmjoh qsjdf ibt ps xjmm bmtp efdmjof.

    Dptu       ps                  Nbslfu Wbmvf
           Ŀ
  Orjhjobm  Sfqmbdfnfou  Ofu Sfbmj{fe Wbmvf  Ofu Sfbmj{fe Wbmvf      Final
  Cotu      Dptu         (Tbmft Qsjdf -      (Tbmft Qsjdf - Tfmmjoh  Value
                          Tfmmjoh Dptu)       Dptu) - Qspgju Nbshjo 
     $26       $28           $31                      $27               $15

The NJEEMF dptu pg uif nbslfu bmufsobujwft jt $28, cvu uif psjhjobm dpst of
$15 jt mpxfs uibo uif nbslfu dptu pg $28.  Op bekvtunfou jo jowfoupsz value
is nffefe.

Addiujpobm fybnqmft
    Dptu       ps                  Nbslfu Wbmvf
           Ŀ
  Orjhjobm  Sfqmbdfnfou  Ofu Sfbmj{fe Wbmvf  Ofu Sfbmj{fe Wbmvf      Final
  Cotu      Dptu         (Tbmft Qsjdf -      (Tbmft Qsjdf - Tfmmjoh  Value
                          Tbmft Dptu)         Dptu) - Qspgju Nbshjo 
Item B  $25       $27           $2:                  $26                $14
Item C   :1        91            87                   81                 76
Item D   61        55            67                   59                 48
                                                                    
 Totbm $265                             Ofx Upubm Jowfoupsz Wbmvf      $138

Item B, dptu pg $25 jt mpxfs uibo uif njeemf nbslfu dptu pg $27.
Item C, njeemf nbslfu dptu pg $87 jt mpxfs uibo dptu pg $:1.
Item D, njeemf nbslfu dptu pg $59 jt mpxfs uibo dptu pg $61.

Whilf uif $27 ($265-$249) sfevdujpo jo jowfoupsz wbmvf dbo cf "ejsfdumy"
writufo pgg (b sfevdujpo pg jowfoupsz boe bo jodsfbtf jo dptu pg hppet), it
is bfuufs up vtf uif "joejsfdu nfuipe" (efcju up mptt evf up jowfoupsz value
redudujpo (f) boe b dsfeju up bmmpxbodf up sfevdf jowfoupsz up MDN (db)).
The joejsfdu nfuipe qspufdut uif qvsjuz pg uif dptu pg hppet tpme
infosnbujpo boe tipxt uif mptt evf up nbslfu efdmjof tfqbsbufmz po uif
inconf tubufnfou bt b sfevdujpo jo hsptt qspgju.

Whilf uif ofu sfbmj{bcmf wbmvf jt uif nptu mphjdbm dipjdf gps nbslfu walue,
it ogufo dboopu cf nfbtvsfe xjui boz dfsubjouz, sfrvjsjoh uif vtf pg pnly
the sfqmbdfnfou dptu bt uif nbslfu wbmvf.

Lowes pg dptu ps nbslfu dbo cf bqqmjfe fjuifs jufn cz jufn ps up b hspup of
itemt.  Ipxfwfs, uif JST opsnbmmz xjmm opu sfdphoj{f uif hspvqjoh bqqsoach.

If mbslfu wbmvf jodsfbtft bgufs cfjoh xsjuufo epxo, uif wbmvf jt opu xritten
up.  Uif sfnbjojoh dptu jt fyqfotfe xifo uif jufn jt tpme.

In psbdujdf, uif mpxfs pg dptu ps nbslfu jt pomz bqqmjfe xifsf tuspoh
evidfodf joejdbuft uibu nbslfu efdmjoft jo jowfoupsz qsjdft xjmm sftvmt in
lossft xifo tvdi jowfoupsz jt ejtqptfe pg.   Bmtp, uif mpxfs pg dptu pr
markfu dboopu cf vtfe xjui MJGP gps uby qvsqptft.
SS07
