The Cheesecake Factory Incorporated NASDAQ: CAKE operates over restaurants and two bakeries in the
United States. In its two bakeries, it bakes and prepares more than desserts, both for its own use in its restaurants
and for sale to a wide variety of wholesalers and retailers. The Cheesecake Factory's inventories consist of restaurant
food and supplies, bakery raw materials, and bakery finished goods. To account for its inventory, the company uses
the averagecost method at its restaurants and the FIFO method at its bakeries. The Cheesecake Factory Incorporated's
financial statements from its Form are as follows:
Click the icon to view the balance sheet.Click the icon to view the income statement.
Which of the following is not true of the FIFO inventory method?
A When costs are decreasing, FIFO results in the highest ending inventory.
B The first costs into inventory are the first costs assigned to COGS.
C The cost of ending inventory is based on the latest costs incurred.
D When costs are increasing, FIFO results in the lowest COGS.
