Since the FIFO costing method excludes prior-period work and costs, it is necessary to create three categories of completed units.

Question

Quizplus · Accepted Answer

The statement is false. The FIFO costing method does not require the creation of three categories of completed units. It simply assumes that the units produced or purchased first are the first units sold or used, and the costs associated with those units are also the first costs charged to COGS or inventory.

Since the FIFO Costing Method Excludes Prior-Period Work and Costs