Deitrick Guitar Company is nearing the end of its worst year ever. With three weeks until year-end, it appears that net income for the year will have decreased by 20% from the previous year. Jim Deitrick, the president and principal shareholder, is distressed with the year's results.
Deitrick asks you, the financial vice-president, to come up with a way to increase the business's net income. Inventory quantities are a little higher than normal because sales have been slow during the last few months. Deitrick uses the weighted-average-cost inventory method, and inventory costs have risen dramatically during the latter part of the year.
Requirement
Write a memorandum to Jim Deitrick to explain how the company can increase its net income for the year. Explain your reasoning in detail. Deitrick is a man of integrity, so your plan must be completely ethical.