Lifo (Last in first out) method will produce highest cost of goods sold because inventory with higher value will be charged first as it arrived in last.
FIFO
Hi - in periods of rising prices, the FIFO (fist in, first out) will give the highest ending inventory. The other two options (LIFO last in first out) will give the lowest ending inventory and the average method will give between the two. Hope this helps!
FIFO (first in first out) is a method of account for inventory. With FIFO, if inventory costs are increasing your cost of goods sold will be lower than under the LIFO (last in first out) method. If inventory costs are increasing, FIFO will result in higher net income (lower COGS) than LIFO. If inventory costs are decreasing, FIFO will result in lower net income (higher COGS) than LIFO.
periodic inventory system
The method of costing that will yield the highest net income is FIFO. FIFO stands for first in, first out.
FIFO
LIFO
Hi - in periods of rising prices, the FIFO (fist in, first out) will give the highest ending inventory. The other two options (LIFO last in first out) will give the lowest ending inventory and the average method will give between the two. Hope this helps!
The techniques of inventory control are as follows:- 1. First In First Out Method(FIFO) 2.Last In First Out Method(LIFO) 3.Highest In First Out Method(HIFO) 4.Base Stock Method 5.Simple Average Method 6.Weighted Average Method
FIFO (first in first out) is a method of account for inventory. With FIFO, if inventory costs are increasing your cost of goods sold will be lower than under the LIFO (last in first out) method. If inventory costs are increasing, FIFO will result in higher net income (lower COGS) than LIFO. If inventory costs are decreasing, FIFO will result in lower net income (higher COGS) than LIFO.
periodic inventory system
The method of costing that will yield the highest net income is FIFO. FIFO stands for first in, first out.
Weighted average inventory valuation method is method in which inventory purchased at any price is put together to calculate one price for allocation in contrast to FIFO or LIFO.
The GAAP method for obsolete or slow moving inventory is to account for all inventory using either market value or cost method. The method which results in the lower amount is the one that is used.
FIFO method is based on the actual cost of each particular unit of inventory. In this method, inventory which is purchased first is sold out first. It ensures that old inventory is not piled up in storage and most companies use this method to evaluate their inventory.
FIFO method where the older items are sold first.
The method of costing that will yield the highest net income is FIFO. FIFO stands for first in, first out.