Problem:
Compare and contrast two of the following inventory valuation methods: first in - first out (FIFO), last in - first out (LIFO), or weighted average. Explain the benefits of each inventory valuation method you selected and how the inventory is valued.
Playing devil's advocate, if a Best Buy type company were to use average cost wouldn't this drastically lower the value of their inventory? It would be difficult to apply the average cost when the technology is always changing. For example, let's use TV's, how would you apply the average cost when you may have an HD TV vs a plasma TV vs a simple flat screen. Thoughts?