The inventory cost under the average cost per unit method will generally fall in between the inventory cost using the LIFO and FIFO methods.

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Quizplus · Accepted Answer

This is because the average cost per unit method calculates the inventory cost by averaging the cost of all units, whereas LIFO and FIFO methods respectively use the last or first costs incurred to value the inventory. This can result in the average cost method yielding a cost that falls between the costs obtained from LIFO and FIFO.

The Inventory Cost Under the Average Cost Per Unit Method