Profit inflation and high average cost

[Ealfardan]

Manager only uses weighted average for inventory valuations. The justification behind this choice is described in detail in this post:

Can you add FIFO mothed insteed on inventory average cost

Currently it’s perpetual weighted average method. Mostly because it handles edge-cases that FIFO and LIFO does not. For example, how would you treat landed costs? Or if you have multiple divisions selling goods on the same day. How would you objectively decide which specific inventory items were sold by each division? In both cases, usually you end up averaging costs for all inventory items. And then it’s no longer FIFO or LIFO. You might as well go all the way and just use perpetual weighted …