During a period of rising inventory costs, the inventory costing method that typically yields the highest net income is the FIFO (First-In, First-Out) method.
This is because FIFO assumes that the older (and cheaper) inventory costs are the ones that are sold first. As a result, when prices are rising, the cost of goods sold (COGS) calculated under FIFO will be lower compared to other methods like LIFO (Last-In, First-Out), resulting in a higher net income.
LIFO, on the other hand, would lead to higher COGS and lower net income during periods of rising costs, as it assumes that the most recently acquired (and more expensive) inventory is sold first.
So, in summary, under rising inventory costs, FIFO yields the highest net income.