8. Latest Purchase Price Method & Next In First Out (or NIFO) Method :

Under this
method stock is not valued at any historical cost already incurred. Rather valuation of
inventory is made at a price which is the probable price of the goods to be received next
to the issue of the inventory.
This method is found to exist very rarely. Its only advantage is that stock valuation is made
at the up-to date replacement cost.
There are some more methods where stock valuation is made at cost. These are

(a) Highest in First Out or HIFO Method : Under this method it is assumed that the lot of
materials whose price is the maximum is to be issued first. The date of actual price of such
materials need not be considered. Thus cost of production is charged at the highest rate
but inventory is valued at the lowest price.
During a period when the price level changes rapidly, this method becomes useful.
(b) Moving Average Method : This may also be Simple Moving Average or Weighted Moving
Average. A moving period is ascertained from a study of past move ments of materials.
Then the average is calculated on the basis of such period.