P7-5 Evaluating the LIFO and FIFO Choice When Costs Are Rising and Falling LO7-2, 7-3 The following information applies to the questions displayed below Income is to be evaluated under four different situations as follows: a. Prices are rising: (1) Situation A: FIFO is used. 2) Situation B: LIFO is used b. Prices are falling: (1) Situation C: FIFO is used. 2) Situation D: LIFO is used. The basic data common to all four situations are: sales, 512 units for $17,920; beginning inventory, 293 units; purchases, 400 units; ending inventory, 181 units; and operating expenses, $3,900. The income tax rate is 35%