Ivanna has a restaurant that prides itself in fresh produce. She always wants to serve the freshest produce she has. She should use a LIFO approach for her produce inventory.

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LIFO (Last-In, First-Out) is an inventory costing method that assumes that the most recently purchased items are the first to be sold. This means that the cost of goods sold is based on the cost of the most recent purchases, which is typically higher than the cost of older purchases. This results in a higher cost of goods sold and a lower net income. LIFO is often used by companies that have a high inventory turnover rate, such as restaurants, because it allows them to report a lower net income and pay less taxes.

Ivanna Has a Restaurant That Prides Itself in Fresh Produce