Using the Last-In First-Out Inventory Costing Method, the dollar amounts representing Merchandise inventory underneath the Current Asset category of the overall balance sheets represents the costs of the earliest (and oldest) inventory purchased by the managers of this company, which were allocated to the ending inventory called Merchandise inventory.

How can I apply the Last-In First-Out Inventory concept to Supplies and/or baking supplies? I just want to know how use the Last-In First-Out Inventory concept and interpret it in the form of a sentence or sentences using Supplies and/or baking supplies. Is this possible?

In your opinion, do you think what I have below makes sense in relation to my trying to talk about Baking supplies in relation to the Last in, First out inventory costing method?

The dollar amounts representing Baking supplies underneath the Current Asset category of the overall balance sheets as of December 31, 2015, as of December 31, 2016, and as of December 31, 2017 represent the costs of the earliest (and oldest) Baking supplies (e.g., baking tools, ingredients, bakeware, sprinkles, candy melts candy, and display and storage) purchased by the managers of this company that were allocated to Baking supplies.

Last-In, First-Out (LIFO) The last-in, first-out (LIFO) cost flow assumption allocates the cost of goods available for sale between ending inventory and cost of goods sold based on the assumption that the most recent purchases (the last in) are the first ones sold (the first out). Therefore, the LIFO cost flow assumption results in the most recent costs incurred being allocated to cost of goods sold, while the carliest (and oldest) costs are allocated to ending inventory. These relationships are shown in Exhibit 7.6