When prices are falling (deflation), which costing method would produce the highest gross margin for the following?
Question:
When prices are falling (deflation), which costing method would produce the highest gross margin for the following? Choose first-in, first-out (FIFO); last-in, first-out (LIFO); or weighted average, assuming that B62 Company had the following transactions for the month.
Calculate the gross margin for each of the following cost allocation methods, assuming B62 sold just one unit of these goods for $400. Provide your calculations.
A. First-in, first-out (FIFO)
B. Last-in, first-out (LIFO)
C. Weighted average (AVG)
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Related Book For 
Principles Of Accounting Volume 1 Financial Accounting
ISBN: 9781593995942
1st Edition
Authors: Mitchell Franklin, Patty Graybeal, Dixon Cooper, OpenStax
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