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    Explain the use of various inventory methods

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    Do certain products fit particularly well with either FIFO, LIFO, or average inventory methods.
    Please explain how the three methods are used.

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    Solution Preview

    I think you are asking if certain types of products fit a particular inventory method better than another method. If that is true, let me explain how FIFO, LIFO and average cost methods are actually used.

    They are only a pricing methodology used to determine gross margin and net income. If inventory consists of small quantities or very high priced items such as diamond jewelry or new cars, the specific identification method is most likely used. That means that each item will be researched for its ...

    Solution Summary

    This 352 word solution explains the use of various inventory methods with examples of industry applications.