To calculate gross margin using the LIFO (Last In, First Out) method, first determine the cost of goods sold (COGS) by using the most recently purchased inventory first. Subtract the COGS from total revenue to find the gross profit. Finally, divide the gross profit by total revenue and multiply by 100 to express it as a percentage. The formula is: Gross Margin (%) = [(Total Revenue - COGS) / Total Revenue] × 100.
1. Weighted Average 2. LIFO (Last-in-last Out) 3. FIFO (First-in-first-out) 4. Lower of cost or market (LCM) 5. Gross Profit Method 6. Dollar-Value- LIFO 7. Retail Method 8. Dollar-value LIFO retail
Lifo Fifo
what is the difference beyween lifo and fifo
When purchase costs of inventory regularly decline, the Last-In, First-Out (LIFO) method of inventory costing will yield the lowest gross profit and income. This is because LIFO assumes that the most recently purchased inventory (which is cheaper in this scenario) is sold first, resulting in higher cost of goods sold (COGS) and lower gross profit. Consequently, this leads to a reduced net income compared to other methods like First-In, First-Out (FIFO) or weighted average cost.
FIFO First in first out LIFO Last in last out
Last In First Out
1. Weighted Average 2. LIFO (Last-in-last Out) 3. FIFO (First-in-first-out) 4. Lower of cost or market (LCM) 5. Gross Profit Method 6. Dollar-Value- LIFO 7. Retail Method 8. Dollar-value LIFO retail
Lifo Fifo
LIFO stands for Last In First Out. Ex: Stack
what is the difference beyween lifo and fifo
a decrease in the LIFO reserve is subtracted from LIFO cost of goods sold.
fifo
b
Indicates the effect on income if LIFO were not used.
When purchase costs of inventory regularly decline, the Last-In, First-Out (LIFO) method of inventory costing will yield the lowest gross profit and income. This is because LIFO assumes that the most recently purchased inventory (which is cheaper in this scenario) is sold first, resulting in higher cost of goods sold (COGS) and lower gross profit. Consequently, this leads to a reduced net income compared to other methods like First-In, First-Out (FIFO) or weighted average cost.
FIFO First in first out LIFO Last in last out
LIFO Reserve