Ann Co Uses the Dollar-Value LIFO Retail Method

question 91

Multiple Choice

Ann Co. uses the dollar-value LIFO retail method. The beginning inventory, purchased when the price index was 100, had a retail value of $4,000 and a cost of $3,600. During the period, purchases amounted to $60,000 at retail ($52,800 at cost) . Sales amounted to $56,300. The year-end price index was 110. What is the cost of ending inventory?

• A) $6,169
• B) $6,504
• C) $6,570
• D) $6,900

---

Definitions:

Markdown

A reduction from the original selling price of goods or services to increase their attractiveness to buyers.

Monopsony Power

The market power held by a single buyer, allowing them to dictate prices to sellers due to a lack of competition.

Monopoly Power

The ability of a monopolist to significantly control market price and exclude competitors by owning a majority of the market share.

Demand Function

A mathematical relationship expressing the quantity of an item demanded at various prices.