LIFO method of pricing of materials is more suitable when ........

Costing - Phase (I & II) Basics of Cost Control and Analysis

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LIFO method of pricing of materials is more suitable when _________.

material prices are rising

material prices are falling

material prices are constant

material prices are fluctuating

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Explanation:

LIFO method of pricing of materials is more suitable when material prices are rising. LIFO method of pricing issues is suitable because materials are issued at the current market prices which are high. This method thus helps in showing a lower profit because of increased charge to production during periods of rising prices and lower profit reduces burden of income-tax.