The Acme Corporation buys 300 units of merchandise in January at $5 each.Acme buys 500 units at $4 each in February and 200 units at $6 each in March. Which of the following statements is true?
A) Whether unit costs are steadily rising or falling,the weighted average cost method always yields a cost of goods sold between that of FIFO and LIFO.
B) FIFO will lead to the highest net income if unit costs are falling.
C) LIFO will always yield a smaller net income than FIFO.
D) Specific identification is the most practical,but least accurate,measure of cost and net income.
Correct Answer:
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