Cool Fizzy Ltd's production manager Phil Palm has been under pressure from senior management to improve divisional profitability (which is also incidentally linked to his management performance bonus). Phil is required to attend an upcoming meeting to explain the average performance. He approaches the management accountant Rachel Murray with the following request: "Rachel, I am under pressure to lift divisional performance. This is going to happen as the summer months approach, but I need a little time. I want you to do me a favour. Could you prepare the January monthlies using FIFO method instead of the weighted average method currently used? I know that it is just as acceptable a method, and the lift in profit it shows will give me the time I need to carry over to the profitable summer season. If you were Rachel, would you agree to Phil's request? Clearly explain your reasons for either agreeing or disagreeing. 

Answer rating: 100% (QA)

As Rachel I would not agree to Phils request to switch from the weighted average method to the FIFO method for preparing the January monthlies Here ar... View the full answer