Which inventory pricing method best approximates specific identification in most manufacturing situations?

Question

Quizplus · Accepted Answer

FIFO (First-In, First-Out) assumes that the oldest goods acquired are sold first, so it is the most suitable method for manufacturing situations with distinct, identifiable units of inventory. It approximates specific identification because the cost of the oldest items is used to calculate the cost of goods sold, which is similar to the actual cost of the specific items sold.

Which Inventory Pricing Method Best Approximates Specific Identification in Most