Blake Company purchased two identical inventory items.The item purchased first cost $16.00,and the item purchased second cost $18.00.Blake sold one of the items for $24.00.Which of the following statements is true?
A)Ending inventory will be lower if Blake uses the weighted-average rather than the FIFO inventory cost flow method.
B)Cost of goods sold will be higher if Blake uses the FIFO rather than the weighted-average inventory cost flow method.
C)The dollar amount assigned to ending inventory will be the same no matter which inventory cost flow method is used.
D)Gross margin will be higher if Blake uses LIFO rather than the FIFO inventory cost flow method.

Question

Quizplus · Accepted Answer

If Blake uses the weighted-average inventory cost flow method,ending inventory will be $17.00.If the company uses FIFO,ending inventory will be $18.00.

Blake Company Purchased Two Identical Inventory Items