When inventory prices are rising, the FIFO method will generally yield a gross margin that is:

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When inventory prices are rising, the FIFO (First-In, First-Out) method generally yields a higher gross margin compared to the weighted-average method. This is because FIFO assumes that the oldest (and often cheaper) inventory is sold first, leaving the newer (and more expensive) inventory in stock. This results in lower cost of goods sold (COGS) and, consequently, a higher gross margin compared to the weighted-average method, which averages the cost of all inventory over the period.

When Inventory Prices Are Rising, the FIFO Method Will Generally