Which of the following is used to calculate the number of units to account for under the first-in,first-out (FIFO)method of inventory valuation of process costing? This is the second department in a company using process costing.
A) To account for = Beginning balance + Started and completed + In process
B) To account for = Beginning balance + Amount transferred in
C) To account for = Beginning balance + In process
D) To account for = Beginning balance + Started and completed

Question

Quizplus · Accepted Answer

The FIFO method in process costing assumes that the first units that enter the process are the first ones to be completed and transferred out. Therefore, the number of units to account for under this method is equal to the beginning balance of units in the department plus the amount transferred in from the previous department. Option B is the correct formula, which calculates the total units to account for. Options A, C, and D either do not include the amount transferred in or include additional units that are still in process and not yet completed.

Which of the Following Is Used to Calculate the Number