Managerial accountants realize that a distinct feature of the first-in,first-out (FIFO)process-costing method is that:
A)it keeps work done on beginning inventory blended with work done during the current period in the calculation of equivalent units.
B)it keeps separate work completed on beginning inventory before the current period from work completed in the current period.
C)work done on ending inventory is kept separate from the work during the calculation of equivalent units and is usually not included in the calculation.
D)managerial accountants fail to assign the costs of the previous accounting period's equivalent units in beginning work-in-process inventory.
E)it is really the same as the weighted-average process-costing method.

Question

Quizplus · Accepted Answer

The distinct feature of the FIFO process-costing method is that it keeps separate work completed on beginning inventory before the current period from work completed in the current period. In other words, FIFO assumes that the first units produced are the first units sold, so the cost of production for the beginning inventory is kept separate from the cost of production for current period inventory. This allows for a more accurate determination of cost of goods sold and ending inventory values.

Managerial Accountants Realize That a Distinct Feature of the First-In,first-Out