ACC 281 Week 1 DQ4 - 7414

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Week 1 DQ4


Should a company ever switch from FIFO to LIFO or from LIFO to FIFO?  Why or why not?  When might it make sense to switch?  Has your company ever done so that you are aware of?


Companies would switch from FIFO to LIFO or vice versa when there is some sort of gain from it. Bakeries do this all the time. They switch from FIFO to LIFO in order to sell fresh items. In dealerships, they make the same switch when the new cars come out. They start selling the newer cars and heavily discount the new older cars. There is not much gain from these transactions other than clearing space on the lot and having less vehicles to send back to the auto maker.



Solution Description

Week 1 DQ4