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When inventory prices are decreasing, the LIFO inventory costing method will yield a GROSS PROFIT that is: O equal to the cost of goods sold under the FIFO method
When inventory prices are decreasing, the LIFO inventory costing method will yield a GROSS PROFIT that is: O equal to the cost of goods sold under the FIFO method. higher than the gross profit under the FIFO method. equal to the gross profit under the FIFO method. less than the gross profit under the FIFO method.
Expert Solution
when inventory prices are decreasing ,the lifo costing method will yield groos profit higher than the groos profit under FIFO method
LIFO assigns the latest costs of the goods purchased or produced to the cost of goods sold, the falling costs mean a lower amount of cost of goods sold on the income statement. That in turn means a higher gross profit than assigning the first or oldest costs to the cost of goods sold under FIFO .
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