First-In, First-Out Inventory (FIFO Inventory) – Accounting In Focus
9:35
accountinginfocus.com
First-In, First-Out Inventory (FIFO Inventory) – Accounting In Focus
The First-In, First-Out method (the FIFO method), is determining the cost of a sale, the company uses the cost of the oldest (first-in) units in inventory.
Jul 29, 2014
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SOLVED: Accounting procedures allow a business to evaluate its inventory costs based on two methods: LIFO (last in first out) or FIFO (first in first out). A manufacturer evaluated its finished goods inventory (in 000s) for five products with the LIFO and FIFO methods. To analyze the difference, they computed FIFO − LIFO for each product. Based on the following results, does the LIFO method result in a lower cost of inventory than the FIFO method?ProductFIFO (F)LIFO (L)12252212119100310011342122
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