Accounting procedures allow a business to evaluate their inventory at LIFO (Last In Fi rst Out) or FIFO (First In First Out). A manufacturer evaluated its finished goods inventory (in $ thousands) for five products both ways. Based on the following results, is LIFO more effective in keeping the value of his inventory lower? What is the decision at the 5% level of significance?
Product FIFO LIFO
1 225 221
2 119 100
3 100 113
4 212 200
5 248 245