The first-in, first-out method computes unit costs by
A)dividing total units by units completed this period.
B)confining equivalent units to the work completed during the current period only.
C)the standard-costing method.
D)separately identifying the conversion costs of beginning and ending inventories.
E)adding opening inventory units to work-in-process units and dividing by total cost.

Question

Quizplus · Accepted Answer

The first-in, first-out (FIFO) method calculates unit costs by only considering the equivalent units completed during the current period. This method assumes that the first units processed or received are the first ones to be completed, and therefore their costs are assigned to units completed first. This approach is appropriate for manufacturing processes where the raw materials or components received first are used in the initial stages of production.

The First-In, First-Out Method Computes Unit Costs by