The dollar-value LIFO inventory cost flow method involves computations based on Inventory pools of similar items A specific price index for each year

 The dollar-value LIFO inventory cost flow method involves computations based on



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Inventory pools of similar items Yes
A specific price index for each year yes

 You Answered Correctly!
This answer is correct. Dollar-value LIFO uses dollar-value pools which are made up of "similar" items (in terms of interchangeability, type of material, or similarity in use). Dollar-value LIFO determines increases or decreases in ending inventory in terms of dollars of the same purchasing power. Ending inventory is deflated to base-year cost by dividing ending inventory by the current year’s specific conversion price index. The resulting amount is then compared with the beginning inventory which has also been stated in base-year dollars.