Business Ethnics Question?

FIFO is an accepted inventory costing method, so yes, it is appropriate and ethical. If prices are rising on the companies inventory products, FIFO will result in higher earnings than LIFO or average cost, therefore a higher bonus. However, if prices are falling on the company's inventory products, FIFO would result in lower earnings and therefore lower bonus. The inportant thing is to choose an inventory costing method and stick with it consistently.