Accounting procedures allow a business to evaluate their inventory at LIFO (Last In First Out) or FIFO (First In First Out). A manufacturer evaluated its finished goods inventory (in $000) for five products both ways. Based on the following results, is LIFO more effective in keeping the value of his inventory lower? What is the alternate hypothesis?
A) µF = µL, or µd = 0
B) µF ≠ µL, or µd ≠ 0
C) µF ≤ µL
D) µF µL
E) None of these statements are correct

Question

Accounting procedures allow a business to evaluate their inventory at LIFO (Last In First Out) or FIFO (First In First Out). A manufacturer evaluated its finished goods inventory (in $000) for five products both ways. Based on the following results, is LIFO more effective in keeping the value of his inventory lower?  What is the alternate hypothesis?
A) µF = µL, or µd = 0 
B) µF ≠ µL, or µd ≠ 0 
C) µF ≤ µL 
D) µF > µL 
E) None of these statements are correct

Quizplus · Accepted Answer

The Answer of Accounting procedures allow a business to evaluate their inventory at LIFO (Last In First Out) or FIFO (First In First Out). A manufacturer evaluated its finished goods inventory (in $000) for five products both ways. Based on the following results, is LIFO more effective in keeping the value of his inventory lower?  What is the alternate hypothesis?
A) µF = µL, or µd = 0 
B) µF ≠ µL, or µd ≠ 0 
C) µF ≤ µL 
D) µF > µL 
E) None of these statements are correct

Accounting Procedures Allow a Business to Evaluate Their Inventory at LIFO