Question: AAA Hardware uses the LIFO method to value its inventory. Inventory at the beginning of the year consisted of 10,000 units of the companys one

AAA Hardware uses the LIFO method to value its inventory. Inventory at the beginning of the year consisted of 10,000 units of the companys one product. These units cost $15 each. During the year, 60,000 units were purchased at a cost of $18 each and 64,000 units were sold. Near the end of the fiscal year, management is considering the purchase of an additional 5,000 units at $18.

What would be the effect of this purchase on income before income taxes? Income before income taxes will be (HIgher,Lower,same) by how much.

2.	What would be the effect of this purchase on income before income taxes using FIFO method? Income before income taxes will be (HIgher,Lower,same) by how much.

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