which inventory management method is used when a business includes the costs of the most recently purchased…

which inventory management method is used when a business includes the costs of the most recently purchased inventory in its calculations of cost of goods sold (cogs)?\nfirst in, first out (fifo)\nlast in, first out (lifo)\njust-in-time (jit)

which inventory management method is used when a business includes the costs of the most recently purchased inventory in its calculations of cost of goods sold (cogs)?\nfirst in, first out (fifo)\nlast in, first out (lifo)\njust-in-time (jit)

Answer

Answer:

B. last in, first out (LIFO)

Brief Explanations:

  • FIFO (first in, first out): Assumes the oldest (first - in) inventory is sold first, so COGS uses costs of earliest - purchased inventory.
  • LIFO (last in, first out): Assumes the most recently purchased (last - in) inventory is sold first. Thus, when calculating COGS, the costs of the most recently purchased inventory are used, which matches the description in the question.
  • JIT (just - in - time): Is an inventory management approach focused on receiving goods just as they are needed in the production process, not related to the costing of COGS based on recent purchases.