Macy’s Inc Company

Macy’s Inc Company

Macy’s Inc is a holding company located in New York America with its headquarters in
Cincinnati, Ohio. The company usually deals with the sales of Housewares, footwear, beauty
products, jewelry, clothing, accessories bedding and furniture. The management has been able to
change its operations to suit the demand of their customers in the market thereby earning it an
influential competitive edge.
The core objectives of companies is to earn profits and maximizing shareholder’s returns.
The firm also aims at providing the best at fair prices. Macy’s Inc company usually handle large
levels of inventories. It has adopted the Last in Fast out (LIFO) as a Costing method. This method
implies that the Most recently produced good are sold first, and those manufactured earlier are sold
later.
Advantages of using LIFO costing method
The method gives the real current market value of the product since the cost of producing
the materials is near to the current market price. It also helps the company not to pay unduly high
tax in times of inflation since the method values goods at the current market value. The third
advantage is that in times of deflation, it helps the company avoid the double pricing effect since
goods are produced at current market price.
Disadvantages of using LIFO costing method
According to a research conducted by the Accounting for management organization, the
LIFO method has some disadvantages. For one, it becomes complicated when purchases are made
at a fluctuating rate which is high and frequently. Secondly, the method also reduces earnings
during inflation times hence negative impact on company’s earning. The third disadvantage is that
it creates the chances of a company to manipulate its reported earnings by altering its end year
purchases.

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