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Explain the four merchandise inventory methods and provide an example for each.Our text says that there are four different methods to determine the cost of inventory. The four methods are specific identification, first-in, first-out (FIFO), last-in, first-out (LIFO), and weighted average costs. Specific Identification:Uses the specific cost of each unit of inventory to determine the ending inventory and cost of goods sold. (Miller-Nobles, Mattison, & Matsumura 2018) This method is normally used by companies that sell specific items such as cars or jewelry. (Miller-Nobles, Mattison, & Matsumura 2018)First-in, first-out (FIFO): This method is the cost of goods sold is based on the oldest purchases-that is, the first units to come in are assumed to be the first units to go out. (Miller-Nobles, Mattison, & Matsumura 2018)(Miller-Nobles, Mattison, & Matsumura 2018)Last-in, first-out (LIFO): This is the opposite of FIFO. Under the LIFO method, ending inventory comes from the oldest costs (beginning inventory and earliest purchases) of the period.