Posted: February 5th, 2019

Stacy Lynn, Inc. (SLI) is a manufacturer of rice cookers. The rice cookers sell for $45 per unit;

Stacy Lynn, Inc.
(SLI) is a manufacturer of rice cookers. The rice cookers sell for $45 per
unit; the sales were 3,600 units in the current year, 2009. SLI has 400 units
available for sale at the end of 2009 and is projecting sales of 4,400 units in
2010. SLI is planning the same production level for 2010 as in 2009, 4,000
units. The variable manufacturing costs for SLI are $16 and the variable
selling costs are only $.50 per unit. ….
Stacy Ann Lynn,
the great grand-daughter of the company’s founder is the current CEO/President
of the company, which is still a family owned business. The previous several
years have been especially difficult due to price-pressure from Chinese
imports. At the moment, all that Stacy believes she can do is to try to keep
the company running until the economy improves. But, the company needs an
immediate infusion of cash. So, she has decided to ask her bank for a large
line of credit to maintain operating viability for the foreseeable future.

.com/re/dotnextlaunch.asp?courseid=9759552&userid=21845831&sessionid=24c1daae77&tabid=r390547ti7jwb7lti64k0pihtbcho35ztqc0fznuxbsaralzxpgwunixvhq5y/c8adogm0i1mn9bjflnf+oiha==&sessionfirstauthstore=true&macid=pkbfmiqfktknredqne0kseopgp2tv4dypj2rydxtsuzhdsfgshdd5gvkkqifhqj2y9o84yh5degs15dbgx/rfftptucxt/el5kzlpheoe1k0yayvivdpjphlzz6ijzydi3i27tsjti0pc0o7z0vlinxnugiqmxa8zs1szn8ewsamojgtxb3l8izqcxsvu9s4edq17gmnmx2v/7evqhpxoksyawpkh9fc15bfoa/okgkvklr9mq1evu7niwlm/3gd”>

Required:
A. If Patty wants to show the bank the maximum profit over the previous
2-year period, which costing method should she present?

B. But, the bank requires that all financial statements conform to
Generally Accepted Accounting Principles (GAAP).
C. The bank has delivered a memo in preparation for the meeting to
negotiate the Credit Line; …for detail refer attachment…..