Lifo fifo comparison essay - robanting.com.
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There are two methods of cost inventory calculation namely, FIFO (First-in-First-Out) and LIFO (Last-in-First-Out). LIFO method has several advantages, for example; the material costs of the goods available reflect the current market prices. In addition, the method eliminates the effect of fluctuations in prices in a period of changing price levels, as it allows the income statement not to.
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FIFO stands for “First-In, First-Out”. It is a method used for cost flow assumption purposes in the cost of goods sold calculation. The FIFO method assumes that the oldest products in a company’s inventory have been sold first.The costs paid for those oldest products are the ones used in the calculation. Here’s What We’ll Cover.
The principle A racking system is loaded with goods from one side which are later retrieved from the other: this is how the (strict) FiFO (first in, first out) principle works.
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