Question

Morgan Industries is comparing and contrasting its ending inventory value in terms of the three common inventory costing methods in order to help management determine the most appropriate method to use. The company determines three values, which are $96,000, $100,000, and $105,000. If management determines that $100,000 is the most appropriate value for its ending inventory, what inventory cost method has it most likely chosen?a. middle of cost or market method. b. weighted average inventory cost method. c. LIFO inventory cost method. d. FIFO inventory cost method.

Answer 1

Answer:

b. weighted average inventory cost method

Explanation:

the weithed average, FIFO and LIFO are the three most common nventory costing methods.

Weighted average method always is in middle ground between the FIFO and LIFO result.

The company has picked neither the lowest or higher, so it picked Weighted Average.

The reason for that, is that W-A as the name implies uses all the goods and calculate a new cost per unit, doing so is influence by the first unit (FIFO) and the last units (LIFO) This makes their valuation in the middle of these other two methods results.