[The following information applies to the questions displayed below,] During the

Question

[The following information applies to the questions displayed below,] During the year, Trombley Incorporated has the following inventory transactions. Unit Cost $ 30 29 28 26 Number of Units 28 Date Jan. 1 Mar. 4 Jun. 9 Nov. 11 Total Cost $840 957 1,064 988 Transaction Beginning inventory Purchase Purchase Purchase 38 38 137 $3,849 For the entire year, the company sells 101 units of inventory for $38 each. value: 6.53 points 4. Which method will result in higher profitability when inventory costs are declining? O Weighted-average FIFO O LIFO

Explanation / Answer

Which method will result in higher profitability when inventory costs are declining?

Answer:

LIFO Method

Explanation

In the case of inventory costs are declining LIFO method Will give higher profit because in the LIFO methods last units come will go first so most recent purchase inventory has lower cost and that will appear in cost of goods sold so ultimately cost of goods sold will be lower so ultimately it will result in to higher profitability

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