Question
Your company recently implemented a Dynamics 365 Supply Chain Management system.
You are currently configuring costing methods for items in inventory. You need to make use of a method normally used for items that have a limited shelf life.
Which of the following is the costing method you should use?
- A. Standard
- B. FIFO Correct
- C. Average
- D. Specific
Explanation
FIFO (first in, first out) assumes that the first items received are the first items issued, which matches how perishable or limited shelf-life goods physically move. Standard cost and weighted average value inventory at a fixed or averaged cost and do not reflect the age of stock. Specific identification links costs to individual units and is typically used for unique, high-value items.
