In 2011, Steel Technologies Inc. changed from the LIFO to the FIFO method for its inventory costing.

Question:

In 2011, Steel Technologies Inc. changed from the LIFO to the FIFO method for its inventory costing. Steel Technologies’ annual report indicated that this change had been instituted because the price at which the firm purchased steel was highly volatile.
Required:
Explain how FIFO cost of goods sold and would be different from LIFO when prices are volatile.
Ending Inventory
The ending inventory is the amount of inventory that a business is required to present on its balance sheet. It can be calculated using the ending inventory formula Ending Inventory Formula =...