Prices of Crude Oil Have Been Steadily Rising Over the Last

question 2

Multiple Choice

Prices of crude oil have been steadily rising over the last two years (The Wall Street Journal, December 14, 2010) . The monthly data on price per gallon of unleaded regular gasoline in the United States from January 2009 to December 2010 were available. Three trend models were created starting with t = 1 and the following output was generated. Using the cubic trend equation, which of the following would be the forecast for the price of regular unleaded gasoline for January 2011?

• A) $3.00
• B) $3.09
• C) $3.175
• D) $3.22

---

Definitions:

LIFO

"Last In, First Out," an inventory valuation method where the last items added to inventory are the first to be used or sold.

Periodic Inventory System

An inventory accounting system where the inventory on hand is determined by physical count at the end of the accounting period, used to update inventory records and cost of goods sold.

Ending Inventory

The total value of all inventory in stock at the end of an accounting period, calculated before new inventory purchases are added.

Lower Of Cost

An accounting principle where the inventory is recorded at either its historical cost or market value, whichever is lower, to report assets conservatively.