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.