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Business is booming at Wildcat Pizza! Customers rave about the yummy menu and are amazed that Wildcat is able to offer such high-quality pizza at fair prices. The owner of Wildcat Pizza, April Longmeadow, has a habit of maintaining a large quantity of inventory items - things like pizza boxes, dough, cheese, toppings, spices, and cans of ground tomatoes. She wants to make sure that she can sell pizzas anytime customers want them, and she is afraid of running out of stock. As a result, Wildcat's storage warehouse is overflowing with inventory and April has no idea what it is worth at any given point. She turns to you, Wildcat's bookkeeper, for help!
Prompt:
Discuss the variables that management should consider when choosing between a FIFO, LIFO and Weighted Average Inventory valuation methods. Be specific with examples of the advantages and disadvantages of each Inventory valuation method.
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