Question

What is the change in the cost of sales for the year if the company had used FIFO to value its inventories. (Enter your answer in millions.)

Answer 1

If the company used FIFO instead of LIFO then the Cost of Sales would lower and value of inventory would higher.

Step-by-step explanation:

FIFO method is used widely by many organizations. This method involves selling the goods that are bought first. The good bought earlier would be at low price than the goods bought later on due to increase in price. The cost of sales therefore would be lower in FIFO than in LIFO. The value of inventory would be higher in FIFO as the good bought at a higher price are not sold first.