If a business wishes to track the costs of completing units in beginning work in process, the first-in-first-out (FIFO)method should be used.

Question

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FIFO method assumes that the first units that enter the production process are the first to be completed and transferred out, thus the costs of beginning work in process are considered first. This provides an accurate measure of the cost of those units.

If a Business Wishes to Track the Costs of Completing