Taylor Company Changed Its Inventory Cost Flow Assumption from FIFO

question 3

Multiple Choice

Taylor Company changed its inventory cost flow assumption from FIFO to LIFO in a period of rising prices. What was the result of the change on ending inventory in the year of the change?

• A) increased ending inventory
• B) decreased ending inventory
• C) no change in ending inventory
• D) cannot be determined from the information given

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Definitions:

Boat Tours

Guided excursions on boats or ships designed to provide passengers with leisure, entertainment, and the opportunity to explore waterways and coastal areas.

Fuel

A material that is used to produce energy, especially by combustion, to generate power or as a source of heat.

Fixed Costs

Fixed costs are business expenses that remain constant regardless of the level of goods or services produced, such as rent, salaries, and insurance.

Cakes

Commonly a sweet baked dessert, typically made from ingredients like flour, sugar, eggs, and butter or oil.