Bach Co. adopted the dollar-value LIFO inventory method as of January 1, 2005. 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:
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Inventory |
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|
Date |
at base year cost |
at dollar value LIFO |
|
1/1/05 |
$90,000 |
$90,000 |
|
2005 layer |
20,000 |
30,000 |
|
2006 layer |
40,000 |
80,000 |
What was the price index used to compute Bach’s 2006 dollar value LIFO inventory layer?
- 1.09
- 1.25
- 1.33
- 2.00