ft14825 Sharde Johnson Attempt 1 Question 2 5 points The inv

ft:1:48:25 Sharde Johnson: Attempt 1 Question 2 (5 points) The inventory costing method that assigns the most recent costs to cost of good sold is: A) average cost. C B) FIFO. C C) LIFO. D) specific identification. Save Question 3 (6 points) Use the following data to calculate the cost of ending inventory under the FIFO method Sept Beginning Inventory 15 units at $20 each NI+

Solution

The inventory method that assigns the most recent costs to cost of good sold is:

ANSWER: LIFO

1.Average Cost Method:

This method assigns inventory costs by calculating a moving average of all inventory purchase costs.

So the most recent cost can’t be consider in this method.

2. First In, First Out:

The first in first out method most closely approximates the real-world purchasing cycle and parallels the actual flow of inventory from purchase to sale. Under the FIFO method, the oldest costs are assigned to inventory items sold, regardless of whether the sold items were actually purchased at that cost.

So under this method also recent cost can’t be consider.

3. Last In, First Out:

The last in first out method is the exact, assigning the most recent inventory costs to items sold. Last in, first out is less practical in most businesses, but there are a few specific situations in which LIFO more closely approximates the actual flow of inventory.

Your most recent purchases of inventory (Last In) are considered to be the first products that you sell (First Out).

So the most recent cost can be consider in this method.

4. Specific Identification Method:

This method perfectly matches inventory costs with units sold, assigning the exact cost of each selling inventory item when the specific item are sold.

So under this method also recent cost can’t be consider.