The moving-weighted-average-cost method generates a gross margin that will be lower than the gross margin generated under FIFO costing when prices are rising.

Question

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When prices are rising, FIFO results in lower cost of goods sold and higher gross margin compared to the moving-weighted-average-cost method, which averages costs and results in higher cost of goods sold.

The Moving-Weighted-Average-Cost Method Generates a Gross Margin That Will Be