Multiple choice

Under which of the following, goods issued for the production represent the current market value?

  1. FIFO

  2. LIFO

  3. Average price

  4. Weighted average

Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

As goods purchased in the last are issued first in LIFO method, thus issues represent the current prices. In FIFO method, goods purchased first are issued first and thus issue represents historic price while stock in hand is valued at current prices. In average method, average price is the basis of issue while in weighted average method, weights are also considered.