Question
Bach Co. adopted the dollar-value LIFO inventory method as of January 1, 2006. A single inventory pool and an internally computed price index are used
Bach Co. adopted the dollar-value LIFO inventory method as of January 1, 2006.
A single inventory pool and an internally computed price index are used to compute Bach's LIFO inventory layers. Information about Bach's dollar-value inventory follows:
| Inventory | ||
|---|---|---|
| Date | at base-year cost | at current-year cost |
| 1/1/06 | $90,000 | $90,000 |
| 2006 layer | 20,000 | 30,000 |
| 2007 layer | 40,000 | 80,000 |
What was the price index used to compute Bach's 2007 dollar-value LIFO inventory layer?
The answer is 1.33. However, I do not understand how.
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EDI Security Control And Audit
Authors: Albert J. Marcella Jr, Sally Chan, John Merriam
1st Edition
0890066108, 978-0890066102
