Final answer:
When using FIFO or weighted average, all inventory is valued using these methods. FIFO assumes the first items purchased are the first sold, while the weighted average method calculates the average cost per unit of inventory.
Step-by-step explanation:
When using the FIFO (First-In, First-Out) or weighted average method to value inventory, all inventory is valued using this method. These methods are commonly used in business and accounting to determine the cost of goods sold and the value of remaining inventory.
FIFO assumes that the first items purchased or produced are the first ones sold or used. This means that the cost of the earliest purchases is recorded as the cost of goods sold, and the cost of the most recent purchases is recorded as the value of remaining inventory.
Weighted average method calculates the weighted average cost per unit of the inventory. It considers the cost of each individual item purchased or produced based on the quantity and value, and then calculates the average cost. This average cost is then used to determine the cost of goods sold and the value of remaining inventory.