The average-cost method produces an ending inventory figure that is somewhere between the figures produced by FIFO and LIFO.

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The average-cost method uses a weighted average of the costs of all units sold and in inventory to calculate the cost of goods sold and the value of ending inventory. This method typically results in an ending inventory figure that is somewhere between the figures produced by FIFO and LIFO, as it takes into account the costs of both older and newer inventory items.

The Average-Cost Method Produces an Ending Inventory Figure That Is