Question

Suppose a company bases its evaluation of the purchasing officer for a refinery on the gross margin on the oil products produced and sold during the year. During the year, the price of a barrel of oil increased from $80 to $90. The value of the inventory of oil at the beginning of the year is $80 or less per barrel. On the last day of the year, the purchasing agent is contemplating the purchase of additional oil at $90 per barrel. Is the agent more likely to purchase additional oil if the company uses the FIFO or LIFO method for its inventories? Explain.



$1.99
Sales0
Views63
Comments0
  • CreatedFebruary 20, 2015
  • Files Included
Post your question
5000