What is the difference between FIFO and weighted average inventory methods?

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B) FIFO assumes first items purchased are first sold while weighted average uses a blended cost per unit. FIFO: oldest inventory sold first, ending inventory at recent prices. Weighted average: total cost / total units = cost per unit applied uniformly. Both acceptable under GAAP.

What is the difference between FIFO and weighted average inventory methods?

✓ Correct Answer: Option B

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