Which inventory cost method offers income tax savings during periods of rising prices? a. Weighted average inventory cost method b. FIFO inventory cost method c. Specific identification inventory cost method d. LIFO inventory cost method

d. LIFO inventory cost method

Explanation:

Last in first out i.e LIFO inventory cost method refers to the valuation method wherein the last purchased inventory i.e the latest is issued out first.

Under this method, the inventory which is purchased recently is the first to be issued. So in event of rising prices, this would lead to issuing inventory purchased at recent prices i.e high cost first.

This would in turn raise the cost of production and reduce net income. Consequently this would lead to reduced taxes.

Thus, during periods of rising prices or inflation, LIFO offers income tax savings.

hi,

henry is an economist and wants to understand the relationship between inflation and consumer spending habits. for his research, he needs the consumer price index for 2014 and the inflation rate. based on the prices of goods given, what will he find to be the cpi and inflation rate for 2014? assume that a consumer’s basket for three consecutive years consists of the following:

you dont privide answer choices.

answer - 15% of a inflatation rate is 15% less in cpi

answerreactive approach;