Question: From what we have been learning when it comes to accounting for inventory under the FIFO, LIFO, and the average costing method, I just need the average costing method clarified. I understand the First In, First Out concept and Last in, First Out. These are pretty similar you are just working backwards. They mirror each other in a sense. I am just a bit confused on how the average costing method plays into it and why a company would use this method in the first place. It seems that you would have to do more Math in this method.