I understand using the current rate method is correct. Ukrainian currency is depreciating and therefor using current XR’s will give the lowest COGS and therefor highest Gross profit.
Since thats the only answer with Current rate you could just stop there.
in the answer it says FIFO gives the highest Gross profit as well compared to Weighted average. It says in an inflationary environment FIFO will give a higher gross profit. First inflation in the Ukranian currency would cause it to depreciate compared to the EURO. In the question it also says the EURO will appreciate specifically(Therefor UKR has to depreciate)).
So if ukranian currency is depreciating then FIFO would give the lowest Gross profit but it says the highest.
Where’s my thinking going wrong here?