Last In, First Out LIFO: The Inventory Cost Method Explained
It sold 500,000 units of the product in each of the first three years, leaving a total of 1.5 million units on hand. Assuming that demand will remain constant, it only lifo adjustment purchases 500,000 units in year four at $15 per unit. When sales are recorded using the FIFO method, the oldest inventory–that was…
