In a period of falling prices, does FIFO or weighted average costing produce the lowest net...

Question

Question

In a period of falling prices, does FIFO or weighted average costing produce the lowest net income?

Answer 1

Answer #1

In a period of falling prices, under FIFO method, cost of goods purchased first are charged against current sales which are lower.

Therefore, in a period of falling prices, FIFO method produces the lowest net income.

Answer 2

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