Arruza Co. is considering switching from the specific-goods LIFO approach to the dollar-value LIFO approach. Because the financial personnel at Arruza know very little about dollar-value LIFO, they ask you to answer the following questions.

a.

What is a LIFO pool?

b.

Is it possible to use a LIFO pool concept and not use dollar-value LIFO? Explain.

c.

What is a LIFO liquidation?

d.

How are price indexes used in the dollar-value LIFO method?

e.

What are the advantages of dollar-value LIFO over specific-goods LIFO?