1. If merchandise inventory is being valued at cost and the price level is decreasing, which of the three methods of costing--LIFO, FIFO, or weighted average will yield

a. the highest inventory cost

b. the lowest inventory cost

c. the highest gross profit

d. the lowest gross profit

2. A manufacturer shipped merchandise to a retailer on a consignment basis. If the merchandise is unsold at the end of the period, in whose inventory should the merchandise be included?