In times of monetary inflation, which of the following methods of inventory valuation results in...

In inflationary environments, LIFO assigns the most recent (higher) costs to the cost of goods sold, resulting in higher COGS and lower taxable income. FIFO does the opposite, leading to lower COGS and higher profits.

“When inflation occurs, the LIFO method results in higher cost of goods sold because it uses more recent, higher-cost inventory values.”

— CPIM Practice Questions, Inventory Valuation (DSP Page 97)