In a period of rising prices,FIFO normally results in a higher profit than does weighted-average cost

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In a period of rising prices, FIFO assumes that the materials purchased first are the first to be used or sold, resulting in a lower cost of goods sold and higher profit. On the other hand, weighted-average cost calculates the average cost of all materials purchased and divides it by the total number of units, resulting in a higher cost of goods sold and lower profit. Therefore, FIFO typically results in a higher profit than weighted-average cost in a period of rising prices.

In a Period of Rising Prices,FIFO Normally Results in a Higher