Advantages of first in first out method, Data Structure & Algorithms

Advantages of First in First out (FIFO) Costing

Advantages claimed for first in first  out (FIFO)  costing method are:

1. Materials used are drawn from the cost record in a logical and systematic manner.

2. Movement of materials in a continuous, orderly, single file manner represents a condition necessary to and consistent with efficient materials control, particularly for materials subject to deterioration, decay and quality are style changes. During periods of inflation the earliest materials that have the lowest purchase price will be issued

3. The method leads to a lower costs of sales calculations and therefore a high profit than would be obtained by using either of the other method, and mostly FIFO is recommended method used in external financial accounting purposes.

FIFO method is recommended whenever:

1. The size and cost of units are large.

2. Materials are easily identified as belonging to a particular purchased lot.

3. Not more than two or three different receipts of the materials are on a materials card at one time.

Disadvantages or Limitations of FIFO Method

1. FIFO method is definitely awkward if frequent purchases are made at different prices and if units from several purchases are on hand at the same time.

2. Added costing difficulties arise when returns to vendors or to the storeroom occur.

Posted Date: 2/28/2013 4:42:34 AM | Location : United States







Related Discussions:- Advantages of first in first out method, Assignment Help, Ask Question on Advantages of first in first out method, Get Answer, Expert's Help, Advantages of first in first out method Discussions

Write discussion on Advantages of first in first out method
Your posts are moderated
Related Questions
State the example of pre- and post-conditions Suppose that function f(x) should have a non-zero argument and return a positive value. We can document these pre- and post-condit

Diffuse Illumination Diffuse illumination means light that comes from all directions not from one particular source. Think about the light of a grey cloudy day as compared to

Operation of Algorithm The following sequence of diagrams shows the operation of Dijkstra's Algorithm. The bold vertices show the vertex to which shortest path has been find ou

Write a recursive function the computes the number of digits in a positive integer n. For example if n = 6598, the function should return 4. Find a variant expression and a thresho

The operations of the Symbol ADT The operations of the Symbol ADT are the following. a==b-returns true if and only if symbols a and bare identical. a symbol bin Unico

for (i = 0; i sequence of statements } Here, the loop executes n times. Thus, the sequence of statements also executes n times. Since we suppose the time complexity of th

Explain an efficient method of storing a sparse matrix in memory. Write a module to find the transpose of the sparse matrix stored in this way. A matrix which contains number o

calculate gpa using an algorithm

Q. Explain the technique to calculate the address of an element in an array. A  25 × 4  matrix array DATA is stored in memory in 'row-major order'. If base  address is 200 and

Q. Sort the sequence written below of keys using merge sort. 66, 77, 11, 88, 99, 22, 33, 44, 55                                                                      Ans: