Accounting Procedures Allow a Business to Evaluate Their Inventory at LIFO

Multiple Choice

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 null 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