Weighted-average: Ending inventory is priced using a weighted-average unit cost. Underperpetual inventory procedure, a new weighted-average is determined after each purchase. Under periodic procedure, the average is determined at the end of the accounting period by dividing the total number of units purchased plus those in beginning inventory into total cost of goods available for sale. In determining cost of goods sold, this average unit cost is applied to each item. Under the weighted-average method, in a period of rising prices net income is usually higher than income under LIFO and lower than income under FIFO. Specific identification: Advantages: (1) States cost of goods sold and ending inventory at the actual cost of specific units sold and on hand, and (2) provides the most precise matching of costs and revenues. Disadvantage: Income manipulation is possible. FIFO: Advantages: (1) FIFO is easy to apply, (2) the assumed flow of costs often corresponds with the normal physical flow of goods, (3) no manipulation of income is possible, and (4) the balance sheet amount for inventory is likely to approximate the current market value. Disadvantages: (1) Recognizes paper profits, and (2) tax burden is heavier if used for tax purposes when prices are rising. LIFO: Advantages: (1) LIFO reports both sales revenue and cost of goods sold in current dollars, and (2) lower income taxes result if used for tax purposes when prices are rising. Disadvantages: (1) Often matches the cost of goods not sold against revenues, (2) grosslyunderstates inventory, and (3) permits income manipulation.