Which of the following is a reason that managers might select the First-In, First-Out (FIFO) method over the Weighted-Average method?
A) Individual units can be separately identified.
B) The FIFO method allows costs from the previous period and the current period to be blended, and the Weighted-Average method does not.
C) The FIFO method is the simpler of the two methods.
D) The FIFO method results in more stable margins as compared to the Weighted-Average method if selling price cannot be changed.

Question

Quizplus · Accepted Answer

FIFO is more appropriate when individual units can be separately identified. The other three choices are characteristics of the Weighted-Average method.

Which of the Following Is a Reason That Managers Might