In a Period of Rising Prices the Inventory Method

The Lower of Cost or Market Rule. _____ b In a period of rising inventory prices FIFO gives higher cost of goods sold than LIFO.


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_____ d In a period of declining inventory prices LIFO will result in higher income tax expense than FIFO.

. There are also some very limited. _____ c Under the weighted-average cost flow method the average cost per unit equals the cost of goods available for sale divided by the number of units available for sale. However as oil prices escalate the importance of transportation economies of scale achieved by making larger and less-frequent shipments increases and trade-offs between inventory and transportation costs become more important.

6 As a result companies have shifted to inventorytransport hybrid strategies that not only focus on safety-stock and cycle-stock. The LIFO method is commonly used in periods of rising prices to reduce income taxes paid. Under the lower of cost or market rule you may be required to reduce the inventory valuation to the market value of the inventory if it is lower than the recorded cost of the inventory.

Our non-foods category grew 15 compared to the same quarter in the prior year as we made strategic investments in inventory in many of our non-food categories to respond to rising demand and.


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