   # If inventory is being valued at cost and the price level is decreasing, which of the three methods of costing—FIFO, LIFO, or weighted average cost—will yield (A) the highest inventory cost, (B) the lowest inventory cost, (C) the highest gross profit, and (D) the lowest gross profit? ### Financial And Managerial Accounting

15th Edition
WARREN + 1 other
Publisher: Cengage Learning,
ISBN: 9781337902663

#### Solutions

Chapter
Section ### Financial And Managerial Accounting

15th Edition
WARREN + 1 other
Publisher: Cengage Learning,
ISBN: 9781337902663
Chapter 6, Problem 4DQ
Textbook Problem
20 views

## If inventory is being valued at cost and the price level is decreasing, which of the three methods of costing—FIFO, LIFO, or weighted average cost—will yield (A) the highest inventory cost, (B) the lowest inventory cost, (C) the highest gross profit, and (D) the lowest gross profit?

(a)

To determine

Identify which of the three methods of costing will yield highest inventory cost.

### Explanation of Solution

Cost flow assumptions:

Cost flow assumptions can be referred to as the method which determines the flow of costs when an inventory is sold. Instead of keeping a track record for cost of each product sold, a company adopts these methods, and identifies which units were sold...

(b)

To determine

Identify which of the three methods of costing will yield lowest inventory cost.

(c)

To determine

Identify which of the three methods of costing will yield highest gross profit.

(d)

To determine

Identify which of the three methods of costing will yield lowest gross profit.

### Still sussing out bartleby?

Check out a sample textbook solution.

See a sample solution

#### The Solution to Your Study Problems

Bartleby provides explanations to thousands of textbook problems written by our experts, many with advanced degrees!

Get Started

Find more solutions based on key concepts
Show that if A1, A2, and A3 are independent events, then P(A1 | A2 A3) 5 P(A1).

Probability and Statistics for Engineering and the Sciences

In what ways is economics a science?

Principles of Economics (MindTap Course List)

DuPONT AND ROE A firm has a profit margin of 2% and an equity multiplier of 2.0. Its sales are 100 million, and...

Fundamentals of Financial Management, Concise Edition (with Thomson ONE - Business School Edition, 1 term (6 months) Printed Access Card) (MindTap Course List) 