First In First Out - What are the benefits of FIFO first in first out?

Q: What are the benefits of FIFO first in first out?

All the advantages of FIFO occur because when a company sells goods, the first costs it removes from inventory are the oldest unit costs. A company cannot manipulate income by choosing which unit to ship because the cost of a unit sold is not determined by a serial number.

Answer

Because the oldest unit costs are the first to be removed from inventory when a corporation sells items, all of the benefits of FIFO occur. Since a serial number does not dictate the cost of a sold unit, a corporation cannot influence income by deciding which unit to send.

First In First Out - What are the benefits of FIFO first in first out?

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