In preparation for significant international operations, ABC Co. has adopted a plan to gradually shift to the same accounting methods as used by its international competitors. Part of this plan includes a switch from LIFO inventory accounting to FIFO (recall that IFRS does not allow LIFO). ABC decides to make the switch to FIFO at January 1, 2012. The following data pertains to ABCs 2012 financial statements. Sales . $550 Inventory purchases ... 350 12/31/12 inventory (using FIFO) ... 580 Compensation expense 17 All sales and purchases were with cash. All of 2012s compensation expense was paid with cash. (Ignore taxes.) ABCs property, plant, and equipment cost $400 and has an estimated useful life of 10 years with no salvage value. ABC Co. reported the following for fiscal 2011 (in millions of dollars):

Compute ABCs inventory turnover for 2011 and 2012 under both LIFO and FIFO. Assume averages are equal to year-end balances where necessary. What causes the differences in this ratio between LIFO and FIFO? Principles

Summary of Significant Accounting Policies Inventory: The company accounts for inventory by the LIFO method. The current cost of the company's inventory, which approximates FIFO, was $ 60 and $ 50 higher at the end of fiscal 2011 and 2010, respectively, than those reported in the balance sheet