ACC 205 Week 3 Discussion 1 - For a company determining the...

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For a company determining the inventory costing method can be a tedious task. Determining which method is the best for the company is critical to success in determining the actual cost of goods in comparison with the amount earned from those goods. When the controller of Sagehen Enterprises wants to change from a LIFO system to a FIFO system, it would be beneficial for the company. A LIFO inventory costing system stands for last in, first out. This means as goods are bought they are added to the inventory in front of the stock already on the shelves and are first to be sold in front of that previous inventory as well. “The layers of inventory are assumed to be sold are based on the reverse order in which they were purchased” (Wainwright, 2012, 5.3). Switching to a FIFO system would be doing things in a completely different manner than the

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