The FIFO cost flow method is used most frequently. In its most basic form, FIFO (first-in, first-out) costing allows you to track the cost of an item/SKU based on its cost at the purchase order receipt and apply this cost to each shipment of the item until the receipt quantity is depleted.
According to FIFO, manufacturing expenses are based on the assumption that now the oldest products in such an organization's inventory have just been sold first. The LIFO technique substitutes such expenses with the premise that the most recent products in an organization's inventory had also been sold first.
Therefore, the correct answer will be option (b)
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