3 Inventory Valuation Methods: FIFO, LIFO and AVCO


  1. Inventory management is an amazing concept, but it has to be done properly. Some recommendations for effective rendering of inventory control are to have the best application available for your company.

    1. First off, the most important thing is to be consistent, no matter which one a company chooses. When you pick one, stick with it to avoid confusion down the line.

      To answer your question, I think FIFO makes the most sense because then the cost of each product or gallon of oil that gets sold matches up with what it cost to produce it and/or obtain it in the first place.

      A manufacturer will continue to work through its inventory and sell off newer and older products, but the nice thing is that the accounting books will balance nicely as the costs out match the costs in.

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