Inventory Flashcards

1
Q

How do you calculate dollar value LIFO?

A
  1. Calculate internal price index. Index = Ending year inventory @ current year cost divided by Ending inventory @ base year cost
  2. Multiply new inventory layer @ base year ost by the index to get new layer @ dollar value LIFO
  3. Add new layer at dollar value LIFO to ending inventory balance from last year dollar value LIFO
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