LIFO, FIFO and WEIGHTED AVERAGE COST, accounting homework help


Question Description

  • Use the Internet to research the annual report of at least one (1) merchandising company. Determine which costing method (Last In First Out [LIFO], First In First Out [FIFO], or weighted average cost) that is used to record inventory by your selected company.
  • Identify the three (3) primary advantages and three (3) primary disadvantages of using the costing method (LIFO, FIFO, and weighted average) that is used to record inventory.
  • Provide support for your response.

Tutor Answer

School: Duke University

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The merchandising company I selected is Wal-Mart. Wal-Mart is an American multinational
corporation having the largest supermarket chain. In order to record inventory, Wal-Mart uses
LIFO (Last In First Out) method. The LIFO strategy works under the presumption that the last
thing of stock acquired is the first sold. Picture a store rack where an agent includes things from
the front, and clients likewise take the thing from the front; the rest of the things of stock that are
found further from the front of the rack are seldom picked, thus stay on the rack. (“LIFO
Inventory Method”, n.d...

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