Which of the following statements is true regarding the FIFO method of process costing?
A) It assumes that the units in beginning inventory are not worked on during the current period.
B) It assumes that the units in beginning inventory were started into production during the current period.
C) It assumes that the units in beginning inventory were finished first during the current period.
D) It assumes that the units in beginning inventory were the same percentage complete as the units in ending inventory.

Question

Quizplus · Accepted Answer

The FIFO method of process costing assumes that the units in beginning inventory were finished first during the current period, while the units in ending inventory are the ones not yet completed. This means that the costs of the first units completed are assigned to the units in beginning inventory and the costs of the last units completed are assigned to the units in ending inventory.

Which of the Following Statements Is True Regarding the FIFO