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

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Definitions:

Global Village

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A Canadian philosopher and professor who famously coined the expressions "the medium is the message" and "global village," emphasizing the impact of media and communication technologies on society.

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