Dollar-value last-in, first-out (LIFO) requires estimated
changes in price levels for particular products. The use of dollar-value LIFO necessitates a particular price index for each year. In this inventory method, all of the costs of similar (but not identical) products are accumulated. Similar products are those that are interchangeable, have similar purposes, constitute the raw materials for a particular product, or are part of the same product line. The conventional retail and average cost retail methods simply calculate the ending inventory at retail and adjust it to cost according to a cost-retail ratio. The weighted- average cost method creates an average cost irrespective of changes in the general price level.