Accounting procedures allow a business to evaluate their inventory at LIFO (Last In First Out) or FIFO
(First In First Out). A manufacturer evaluated its finished goods inventory (in $ thousands) for five
products both ways. Based on the following results, is LIFO more effective in keeping the value of his
inventory lower?
Product FIFO LIFO
1 225 221
2 119 100
3 100 113
4 212 200
5 248 245
