Blake Company purchased two identical inventory items. The item purchased first cost $17.00, and the item purchased second cost $18.00. Blake sold one of the items for $30.00. Which of the following statements is true? Ending inventory will be lower if Blake uses the weighted-average rather than the FIFO inventory cost flow method. Cost of goods sold will be higher if Blake uses the FIFO rather than the weighted-average inventory cost flow method. Gross margin will be higher if Blake uses LIFO rather than the FIFO inventory cost flow method. The dollar amount assigned to ending inventory will be the same no matter which inventory cost flow method is used.

Question

Business

Rhett Haley

16 February, 01:05

Blake Company purchased two identical inventory items. The item purchased first cost $17.00, and the item purchased second cost $18.00. Blake sold one of the items for $30.00. Which of the following statements is true? Ending inventory will be lower if Blake uses the weighted-average rather than the FIFO inventory cost flow method. Cost of goods sold will be higher if Blake uses the FIFO rather than the weighted-average inventory cost flow method. Gross margin will be higher if Blake uses LIFO rather than the FIFO inventory cost flow method. The dollar amount assigned to ending inventory will be the same no matter which inventory cost flow method is used.

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Answers (1)

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Isai Howe · Answer 1

Ending inventory will be lower if Blake uses the weighted-average rather than the FIFO inventory cost flow method.

Explanation:

Ending inventory will be lower if Blake uses the weighted-average rather than the FIFO inventory cost flow method.

True as under weighted average:

(17 + 18) / 2 = 17.50

the ending inventory will be one unit valued at $17.50

while under FIFO the 17 dollar unit was sold and declare cost

while the second is keep under ending invenotry at $18.00