The managers of Venice Company receive performance bonuses based on the net income of the firm. Which inventory costing method are they likely to favor in periods of declining prices?

A) LIFO
B) Average Cost
C) FIFO
D) Physical inventory method

Inventory Costing Method

A system used to assign costs to inventory and determine the cost of goods sold, examples include FIFO, LIFO, and weighted average.

Declining Prices

A market condition where the prices of goods or services decrease over time, often indicating a surplus or decreased demand.

Net Income

The net income of a business, which is obtained by deducting all costs and taxes from its total revenue.