Accounting Procedures Allow a Business to Evaluate Its Inventory Costs

Multiple Choice

Accounting procedures allow a business to evaluate its inventory costs based on two methods: LIFO (last in first out) or FIFO (first in first out) . A manufacturer evaluated its finished goods inventory (in $000s) for five products with the LIFO and FIFO methods. To analyze the difference,they computed FIFO − LIFO for each product. Based on the following results,does the LIFO method result in a lower cost of inventory than the FIFO method? This example is what type of test?

A) A one-sample test of means
B) A two-sample test of means
C) A paired t-test
D) A test of proportions