Fundamentals of Cost Accounting 3rd Edition by William N. Lanen, Shannon W. Anderson, Michael Maher

Exercise 9

We have discussed two methods for process costing, weighted average and FIFO. Your colleague recommends last-in, first-out (LIFO) process costing to the controller as a new system. The controller is concerned about the recommendation because the cost records are maintained on a FIFO basis. Indeed, the controller has not even heard of using LIFO for process cost accounting. Can you suggest how the controller might resolve the problem?