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Risen, Inc. has beginning inventory of $16 which consists of 2 units at $8 each. It purchased 10 units at $10 each. It sold 5 units for $20 each. Which would result in the higher Gross Profit, FIFO or LIFO and why

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The FIFO would result in a higher gross profit. The reason is that the cost of purchasing the inventory is increasing with the passage of time.

Which inventory method would result in a higher gross profit?

LIFO means last in first out. It means that it is the last purchased inventory that is the first to be sold. FIFO means first in, first out. It means that it is the first purchased inventory that is the first to be sold.

Cost of goods sold using LIFO = 5 X $10 = $50

Profit = (20 x 5) - 50 = $50

Cost of goods sold using FIFO = (2 X $8) + (3 X $10) = $46

Profit = (20 x 5) - $46 = $54

To learn more about FIFO, please check: https://brainly.com/question/294129

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