Disadvantages of First In First Out Method (FIFO):

[MD. ABDUR ROUF]

This method suffers from the following limitations:
(i) Because of violent changes in prices of materials, it involves somewhat complicated calculations and, therefore, it
involves somewhat complicated calculations and, therefore,increase the changes of clerical errors.
(ii) The prices of issues of materials may not reflect current market prices and, therefore, during the period of inflation,
the charge to production is unreasonably low.
(iii) Comparison between different jobs executed by the firm becomes sometimes difficult. A job commenced a few
minutes before another job might have consumes the supply of lower priced stock. This is particularly because of that
the fact the first job might have completely exhausted the supply of materials of a particular lot.