In highly competitive businesses where inventory is subject to price fluctuations and model or style upgrades, it is desirable to utilize the weighted average method costing method.

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In such businesses, the First-In, First-Out (FIFO) method is often preferred because it matches the cost of items with their actual chronological flow, better reflecting the cost of the latest inventory and its relevance to current market conditions.

In Highly Competitive Businesses Where Inventory Is Subject to Price