Production cost reports prepared using first-in,first-out (FIFO)method determine the average cost of equivalent units of production by combining beginning inventory costs with current period costs.

Question

Quizplus · Accepted Answer

Production cost reports prepared using FIFO method do not combine beginning inventory costs with current period costs to determine average cost of equivalent units of production. Instead, they assume that the units in beginning inventory are completed first and assign the cost of these units to the first units completed in the current period, and so on.

Production Cost Reports Prepared Using First-In,first-Out (FIFO)method Determine the Average