Jeff Stevenson was recently hired as a new manager for Flick's Electronics. His compensation is composed of a base salary and a bonus based on gross profit. The bonuses are to be paid monthly, as determined by the gross profit for the preceding month.
Flick's Electronics currently uses a periodic inventory system, but Jeff would like to see the company move to a perpetual system. The company's owners are willing to consider the change, provided that Jeff prepares a written analysis outlining the two methods and detailing the benefits and costs of switching to the perpetual system.
Required:
Prepare a report that Jeff could present to the owners of Flick's Electronics to support his request to change to a perpetual inventory system.