Two companies report the same cost of goods available for sale, but each employs a different inventory cost formula. If the unit cost of purchasing inventory decreased during the period, which one of the following statements is correct:

Select one:

a.

FIFO method will report a lower ending inventory.

b.

Average cost will report a lower ending inventory.

c.

FIFO will report a lower cost of goods sold.

d.

Average cost will report a higher cost of goods sold.