Which of the following is true of the first-in, first-out costing method?
A)It calculates the equivalent units of output at the beginning of a reporting period.
B)It includes only prior-period work in determining the completed units of output.
C)It uses only current output to calculate the current-period unit cost.
D)It treats the work in beginning work-in-process as belonging to the current period.

Question

Quizplus · Accepted Answer

The first-in, first-out (FIFO) costing method assumes that the oldest inventory items are sold first, hence it uses only the costs of the current period's production to calculate the unit cost of the items sold during that period. This method does not mix costs from previous periods with the current period when calculating the cost of goods sold.

Which of the Following Is True of the First-In, First-Out