Which method of inventory pricing best approximates specific identification of the actual flow of costs and units in most manufacturing situations?
A) Average cost
B) First-in, first-out
C) Last-in, first-out
D) Base stock

Question

Quizplus · Accepted Answer

First-in, first-out (FIFO) best approximates specific identification of the actual flow of costs and units in most manufacturing situations. This method assumes that the first items purchased or produced are the first items sold or used, which tends to reflect the actual physical flow of goods in manufacturing processes.

Which Method of Inventory Pricing Best Approximates Specific Identification of the Actual