XYZ Inc.uses the average cost formula in a perpetual inventory system. (Use unrounded numbers in your calculations but round to the nearest cent for presentation purposes in your answer.)
If XYZ Inc.was using the FIFO cost formula instead of average, gross profit from the June 8 sale would be
A)higher.
B)lower.
C)the same.
D)cannot be determined.

Question

XYZ Inc.uses the average cost formula in a perpetual inventory system. (Use unrounded numbers in your calculations but round to the nearest cent for presentation purposes in your answer.)
 If XYZ Inc.was using the FIFO cost formula instead of average, gross profit from the June 8 sale would be
A)higher. 
B)lower. 
C)the same. 
D)cannot be determined.

Quizplus · Accepted Answer

The Answer of XYZ Inc.uses the average cost formula in a perpetual inventory system. (Use unrounded numbers in your calculations but round to the nearest cent for presentation purposes in your answer.)
 If XYZ Inc.was using the FIFO cost formula instead of average, gross profit from the June 8 sale would be
A)higher. 
B)lower. 
C)the same. 
D)cannot be determined.

XYZ IncUses the Average Cost Formula in a Perpetual Inventory System