Benson Company Purchased Two Identical Inventory Items

question 54

Multiple Choice

Benson Company purchased two identical inventory items. The item purchased first cost $14.00, and the item purchased second cost $15.00. Benson sold one of the items for $24.00. Which of the following statements is true?

• A)Ending inventory will be lower if Benson uses weighted average than if FIFO were used.
• B)Cost of goods sold will be higher if Benson uses FIFO than if weighted average were used.
• C)The dollar amount assigned to ending inventory will be the same no matter which cost flow method is used.
• D)Gross margin will be higher if Benson uses LIFO than it would be if FIFO were useD.If Benson uses weighted average, ending inventory will be $14.50. If the company uses FIFO, ending inventory will be $15.00.

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