The correct answer is A. LIFO (Last In, First Out).
LIFO is an inventory costing method in which the cost of goods sold is based on the assumption that the last items purchased are the first items sold. This means that the cost of goods sold will be based on the most recent prices, which will be higher in a period of rising prices.
FIFO (First In, First Out) is an inventory costing method in which the cost of goods sold is based on the assumption that the first items purchased are the first items sold. This means that the cost of goods sold will be based on the oldest prices, which will be lower in a period of rising prices.
The Simple Average Method is an inventory costing method in which the cost of goods sold is based on the average cost of all the items in inventory. This method will produce a cost of goods sold that is somewhere between the cost of goods sold under LIFO and FIFO.
The Inflated Price Method is not an actual inventory costing method. It is a hypothetical method that would produce the highest possible cost of goods sold. This method would be used to artificially inflate profits.
In conclusion, LIFO is the inventory costing method that tends to produce the highest cost of goods sold in a period of rising prices.