When using dollar-value LIFO, if the incremental layer was added last year, it should be multiplied by
A) last year's cost ratio and this year's index.
B) this year's cost ratio and this year's index.
C) last year's cost ratio and last year's index.
D) this year's cost ratio and last year's index.

Question

Quizplus · Accepted Answer

In dollar-value LIFO, an incremental layer added in a previous year is valued using the cost ratio and index from that specific year, which means last year's cost ratio and last year's index should be used.

When Using Dollar-Value LIFO, If the Incremental Layer Was Added