Inventory Costing When Inventory Quantities Are Small}

A number of companies have adopted a just-in-time procedure for acquiring inventory. These companies have arrangements with their suppliers that require the supplier to deliver inventory just as the company needs the goods. As a result, just-in-time companies keep very little inventory on hand.

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1. Should the inventory costing method (FIFO or weighted average) have a material effect on cost of goods sold when a company adopts the just-in-time procedure and reduces inventory significantly?

2. Once a company has switched to the just-in-time procedure and has little inventory, should the inventory costing method (FIFO or weighted average) affect cost of goods sold?

\section*{Case