Accounting Procedures Allow a Business to Evaluate Its Inventory Costs

question 54

Multiple Choice

Accounting procedures allow a business to evaluate its inventory costs based on two methods: LIFO (last in first out) or FIFO (first in first out) . A manufacturer evaluated its finished goods inventory (in $000s) for five products with the LIFO and FIFO methods. To analyze the difference,they computed FIFO − LIFO for each product. Based on the following results,does the LIFO method result in a lower cost of inventory than the FIFO method? This example is what type of test?

• A)A one-sample test of means
• B)A two-sample test of means
• C)A paired t-test
• D)A test of proportions

---

Definitions:

Optimal Way

The most desirable or effective method to achieve a specific goal or result.

Privately Owned Resources

Refers to assets or property owned by individuals or corporations rather than by the government or the public.

Bad Apple Effect

The tendency for one person's negative behavior to corrupt a group's dynamics or moral.

Social Loafer

An individual who contributes less effort to a collaborative task when part of a group than when working alone.