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When the cost of raw materials is increasing, FIFO accounting?


When the cost of raw materials is increasing, FIFO accounting
Question 45 answers
yields higher ending inventory values than LIFO.
produces higher unit sales than using LIFO.
yields higher cost of goods sold than LIFO.
All of the above.

538 day(s) ago

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BruinCPA 		C.

Posted 538 days ago

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MelonsO 		With FIFO, the older stock is assumed to have been sold first, which would have been cheaper in this scenario, so FIFO would yeild a higher ending inventory value (the more expensive recent product is still in stock).
It also, therefore, means a lower cost of sales. Not sure that it has any effeect at all on unit sales...

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