In a period of rising purchase costs,FIFO usually gives a higher cost of goods sold,lower taxable income and therefore,yields a tax advantage.

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In a period of rising purchase costs, FIFO (First In, First Out) usually results in a lower cost of goods sold and higher taxable income, because the older, cheaper costs are recorded as cost of goods sold first. This typically leads to a tax disadvantage compared to LIFO (Last In, First Out), which would report higher costs of goods sold and lower taxable income in a period of rising costs.

In a Period of Rising Purchase Costs,FIFO Usually Gives a Higher