Chapter 6, Problem 77.2C

To determine

Introduction:

The first in, first out (FIFO) method of inventory valuation is a cost stream supposition that the first products obtained are likewise the first merchandise sold. In many organizations, this presumption intently coordinates the genuine stream of merchandise, as is viewed as the most hypothetically right inventory valuation method.

To choose:

If Hill Motor Company had used the FIFO inventory costing method, would the reduction in ending inventory quantities have increased net income?