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The Acme Corporation starts the year with a beginning inventory of 410 units at $16 per unit. The company purchases 555 units at $26 each in February and 420 units at $17 each in October. Acme sells 205 units during the year. Acme has a periodic inventory system and uses the FIFO inventory costing method. What is the amount of cost of goods sold?
$3,280$5,330$3,519$3,485
Which of the following statements about inventory costing methods is correct?
a) A change in inventory method is allowed only if it improves the accuracy of the company's financial results.
b) During a period of rising prices, LIFO results in a higher income tax expense than does FIFO.
c) International Financial Reporting Standards (IFRS) allow the use of LIFO but not FIFO.
d) In the U.S., if a company uses LIFO on the income tax return, it may use a different method for financial reporting.
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