When Using Dollar-Value LIFO, If the Incremental Layer Was Added

question 114

Multiple Choice

When using dollar-value LIFO, if the incremental layer was added last year, it should be multiplied by

• A) last year's cost ratio and this year's index.
• B) this year's cost ratio and this year's index.
• C) last year's cost ratio and last year's index.
• D) this year's cost ratio and last year's index.

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Definitions:

Purchase Requisitions

Formal requests made within an organization to procure goods or services.

Cost Drivers

Factors that cause the cost of an activity to go up or down, such as the volume of production activity.

Return on Investment

A measure used to evaluate the efficiency of an investment or to compare the efficiencies of several investments.

Divisional Performance Measure

Metrics or standards used to evaluate the efficiency, profitability, and productivity of a distinct segment or division within a larger company.