The

FIFO

moving-weighted-average-cost

method produces a higher cost of goods sold (and therefore a lower gross margin) because inventory unit costs are

rising

decreasing

in this scenario. While the

FIFO

weighted-average-cost

method includes the earlier inventory first, thereby including lower cost for goods sold, the

FIFO

moving-weighted-average-cost

method uses all inventory on hand in determining the cost of goods sold. This leads to a higher cost of goods sold in times of

rising

decreasing

prices.