Which of the following statements regarding first-in, first-out (FIFO) process costing is/are true? (A) First-in, first-out (FIFO) process costing transfers out the costs in beginning inventory before transferring out the costs associated with units started and completed. (B) First-in, first-out process costing requires one additional step in assigning costs to the units transferred out and the ending Work-in-Process Inventory. A. A only. B. B only. C. Both A and B. D. Neither A nor B.

Question

Business

Isabelle

11 August, 00:59

Which of the following statements regarding first-in, first-out (FIFO) process costing is/are true? (A) First-in, first-out (FIFO) process costing transfers out the costs in beginning inventory before transferring out the costs associated with units started and completed. (B) First-in, first-out process costing requires one additional step in assigning costs to the units transferred out and the ending Work-in-Process Inventory. A. A only. B. B only. C. Both A and B. D. Neither A nor B.

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Norah Mcbride · Answer 1

Answer: The correct answer is "A. A only".

Explanation: First-in, first-out (FIFO) process costing first transfers out the costs in beginning inventory because the oldest units are the first to leave (First in - First out).

And it does not require an additional step in cost allocation to units transferred out and the final Work-in-Process inventory.