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in 2024, hopyard lumber changed its inventory method from lifo to fifo. inventory at the end of 2023 of $127,000 would have been $145,000 if fifo had been used. inventory at the end of 2024 is $163,000 using the new fifo method but would have been $148,000 if the company had continued to use lifo. what is the effect of the change on 2024 cost of goods sold?

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abiolataiwo2015

If  in 2024, hopyard lumber changed its inventory method from lifo to fifo and inventory at the end of 2023 of $127,000 would have been $145,000 if fifo had been used. The effect of the change on 2024 cost of goods sold is: $3,000 increase.

What is cost of goods sold?

Cost of goods sold can be defined as those cost that incurred  during production process.

Now let find the  effect of the change on 2024 cost of goods sold

Increase in Beginning Inventory, 2024 $18,000

($145,000 - $127,000)

Less: Increase in Ending Inventory, 2024 $15,000

($163,000 - $148,000)

Increase in Cost of Goods Sold $3,000

($18,000 - $15,000)

Therefore the effect is increase in cost of goods sold of the amount of $3,000.

Learn more about cost of goods sold here:https://brainly.com/question/24561653

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