Sweet Treats Is Considering a Change in Its Inventory Valuation

question 91

Multiple Choice

Sweet Treats is considering a change in its inventory valuation method. Sweet Treats currently uses the FIFO method and is considering a change to the LIFO method. Sweet Treats started the year on January 1 with inventory at a FIFO cost of $35,000 and a LIFO cost of $26,750. The ending inventory on December 31 is $29,980 at FIFO cost and $25,810 at LIFO cost. Cost of goods sold under the LIFO basis is $74,600 for the current year. The LIFO effect is ________.

• A) $8,250
• B) $4,170
• C) $12,420
• D) $4,080

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