Answer
I agree with the plant controller to some extent. Long-term contracts with materials suppliers at fixed prices can stabilize direct material costs. However, the choice between the weighted-average and FIFO methods can still have an impact, especially when considering other cost components like labor, energy, and maintenance that may not have fixed prices. The amount of inventory at the beginning and end of an accounting period also plays a role in the method's influence on operating income and inventory amounts.
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