ECONOMICS

Detailed explanation-1: -If the costs of the manufacturing inputs remain fairly stable, the weighted average and FIFO method will produce very similar results.

Detailed explanation-2: -The weighted average cost method will always yield results between FIFO and LIFO. If ending inventory for the year is overstated, stockholders’ equity reported on the balance sheet at the end of the year is understated. The Boxwood Company sells blankets for $ 32.00 each.

Detailed explanation-3: -Under FIFO the first 10 units of “X that are depleted will be costed at $3 per unit and then the next 10 units will be costed at $3.50 per unit. This differs from average costing as in average costing all units would be costed at $3.25 per unit which is the average cost per unit.

Detailed explanation-4: -The key difference between FIFO and weighted average is that FIFO is an inventory valuation method where the first purchased goods are sold first whereas weighted average method uses the average inventory levels to calculate inventory value.