Purchasing Operations and LIFO versus FIFO Suppose a company bases its evaluation of the purchasing officer for a refinery on the gross margin on the oil products produced and sold during the year. During the year, the price of a barrel of oil increased from $20 to $30. The value of the inventory of oil at the beginning of the year is $20 or less per barrel. On the last day of the year, the purchasing agent is contemplating the purchase of addi- tional oil at $30 per barrel. Is the agent more likely to purchase additional oil if the company uses the FIFO or LIFO method for its inventories? Explain.