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what inventory system should thread select if it wants to maximize the inventory car 603511

Thread Co. is selecting its inventory system in preparation for its first year of operations. Thread intends to use either the periodic weighted-average method or the perpetual moving-average method, and to apply the lower of cost or market rule either to individual items or to the total inventory. Inventory prices are expected to generally increase throughout 2006, although a few individual prices will decrease. What inventory system should Thread select if it wants to maximize the inventory carrying amount at December 31, 2006?

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Inventory method

Cost or market application

a.

Perpetual

Total inventory

b.

Perpetual

Individual item

c.

Periodic

Total inventory

d.

Periodic

Individual item

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