Costing method for stock

FIFO  is best  method 

It depends on many factors. If prices are too fluctuating then the average price method is preferred. FIFO is widely used as it is more logical. If price movements are negligible standard price method is used.

FIFO is  best method for costing.

AS 2 is applicable for presentation & disclosures in financials. But these methods are useful for internal analysis like arriving at cost of your product etc

But internal analysis is also very much essential and important to arrive at your cost & thereby to arrive at a selling price which makes sense. Financials are end results but to get there you need to have a plan which is based on these internal analyses and projections.