<Li> last - in first - out (LIFO) </Li> <Li> highest in, first out (HIFO) </Li> <Li> average cost or weighted average cost </Li> <P> These methods produce different results because their flow of costs are based upon different assumptions . The FIFO method bases its cost flow on the chronological order purchases are made, while the LIFO method bases it cost flow in a reverse chronological order . The average cost method produces a cost flow based on a weighted average of goods . </P>

State the basis on which inventory should be valued