Hoover Company purchased two identical inventory items. The item purchased first cost $38.50. The item purchased second cost $43.00. Then Hoover sold one of the inventory items for $65. Based on this information, which of the following statements is true?
A. The ending inventory is $43.00 if Hoover uses the LIFO cost flow method.
B. The cost of goods sold is $38.50 if Hoover uses the LIFO cost flow method.
C. The cost of goods sold is $43.00 if Hoover uses the FIFO cost flow method.
D. The gross margin is $24.25 if Hoover uses the weighted-average cost flow method.
Answer: D
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