Last In First Out - What is FIFO and LIFO example?

Q: What is FIFO and LIFO example?

FIFO (“First-In, First-Out”) assumes that the oldest products in a company's inventory have been sold first and goes by those production costs. The LIFO (“Last-In, First-Out”) method assumes that the most recent products in a company's inventory have been sold first and uses those costs instead.

Answer

Based on the assumption that a company's earliest items have sold out first, FIFO ("First-In, First-Out") allocates resources according to the manufacturing costs of those products. The LIFO ("Last-In, First-Out") technique utilizes the expenses of the most recently sold items instead of older ones, based on the assumption that these things have already been sold.

Last In First Out - What is FIFO and LIFO example?

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