Sweet Treats Is Considering a Change in Its Inventory Valuation

question 101

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 $31,000 and a LIFO cost of $26,500.The ending inventory on December 31 is $29,650 at FIFO cost and $25,800 at LIFO cost.Cost of goods sold under the LIFO basis is $74,600 for the current year.The LIFO effect is ________.

• A)$4,500
• B)$3,800
• C)$8,350
• D)$650

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