what are the inventory costing methods for calculating ending inventory available?
- there are six types available;
- 1. Specific Identification- Tracks costs to a specific item. This is used for unique inventory like Ferrari's
2. FIFO- this simply means inventory that comes in first leaves first.
3. LIFO- this simply means inventory that comes in last leaves first.
4. Moving Avg- this is a perpetual avg system. Takes an average of cost of inventory everytime a sale is made.
5. Weighted Avg- this is a periodic avg system. Takes avg of inventory periodically to value ending inventory which in turn calculates COGS.
6. Dollar-Value LIFO- Inventory gets measured in dollars instead of units. so focus on changes in dollars rather than unites. Inventory is valued @ begin vs end. Simply bring the Beg yr $'s vs ending $'s which are deflated using CPI gives diff.