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    SAZIA's Avatar
    SAZIA Posts: 2, Reputation: 1
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    #1

    Apr 29, 2012, 04:40 PM
    Inventory flow methods
    Give reasons for the variations in cost of sales and profits in FIFO,LIFO,and MOVING AVERAGE?
    SAZIA's Avatar
    SAZIA Posts: 2, Reputation: 1
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    #2

    Apr 29, 2012, 04:47 PM
    What factors must be considered in choosing inventory flow method?
    It is related to accounting
    lee8wil's Avatar
    lee8wil Posts: 1, Reputation: 1
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    #3

    Apr 30, 2012, 08:15 PM
    Yes
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    paraclete Posts: 2,706, Reputation: 173
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    #4

    Apr 30, 2012, 09:11 PM
    the different systems produce differences in product cost and thus impact the cost of sales calculation FiFO means that inventory will be valued at latest cost, LIFO means that inventory will be valued a earliest cost and average cost means inventory will be valued at the average.

    How this impacts calculations depends on the rapidity of inventory turnover, in a slow moving inventory there may be little impact because there will be few price points.

    In relation to the second question it is a matter of rapidity of inventory turnover, tax minimimisation and the nature of the business
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