Lee Manufacturing uses process costing. The following information is available for the current year: If Lee uses the FIFO method of process costing, which units are assumed to be the first ones finished during the year?
A) The 1,600 units in ending inventory
B) The 10,000 units that were started in the current period
C) The 1,000 units in beginning inventory
D) The 12,000 units that were available in the current period

Question

Lee Manufacturing uses process costing. The following information is available for the current year:  If Lee uses the FIFO method of process costing, which units are assumed to be the first ones finished during the year?
A) The 1,600 units in ending inventory 
B) The 10,000 units that were started in the current period 
C) The 1,000 units in beginning inventory 
D) The 12,000 units that were available in the current period

Quizplus · Accepted Answer

FIFO assumes that the first units started in production are the first ones finished and transferred out of the process. Therefore, the units in beginning inventory are assumed to be the first ones finished during the year.

Lee Manufacturing Uses Process Costing