The selection of an appropriate inventory cost formula for an individual company is made by

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The selection of an appropriate inventory cost formula is the responsibility of management as it involves determining the most appropriate method to match the cost of goods sold with revenue in order to accurately reflect the company's profitability. While external auditors may review and provide recommendations on inventory costing methods, the ultimate decision lies with management. Accounting standards and International Financial Reporting Standards provide guidelines for inventory accounting but do not dictate a specific cost formula.

The Selection of an Appropriate Inventory Cost Formula for an Individual