If the Unit Price of Inventory Is Increasing During a Period

question 221

True/False

If the unit price of inventory is increasing during a period a company using the LIFO inventory method will show less gross profit for the period than if it had used the FIFO inventory method.

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Definitions:

Mixers

Devices used for blending ingredients together, commonly found in cooking, baking, and cocktail making.

Diseconomies of Scale

A condition in which a firm’s average costs increase as production increases.

Returns to Scale

The change in output as a result of proportionately changing all inputs in the production process, indicating increasing, constant, or decreasing returns.

Marginal Cost

An uplift in the sum total of costs incurred by producing another unit of a product or service.