Kelly Company adopted dollar-value LIFO on January 1, 2015, using two inventory pools each of which includes two types of inventory items. Kelly uses the double-extension method to compute the appropriate cost index. The following information about the inventory at the end of each year is available:

Pool 1

Year	Number of Units	Type	Average Cost Per Unit
2015	20,000	A	$10
	10,000	B	20
2016	30,000	A	11
	12,000	B	24
2017	40,000	A	12
	14,000	B	22
2018	45,000	A	12
	13,000	B	25

Pool 2

Year	Number of Units	Type	Average Cost Per Unit
2015	40,000	C	$5
	20,000	D	8
2016	50,000	C	7
	22,000	D	9
2017	46,000	C	6
	20,000	D	8
2018	60,000	C	7
	25,000	D	8

1. Compute the cost index for each year for each pool using a base of 100 for each index.

2. Compute the dollar-value LIFO inventory at the end of each year.

Answer rating: 100% (QA)

Cost index is the comparative umerical value to judge movement in the cost of inventory The problem has two different pool Pool 1 and Pool 2 Each pool ... View the full answer