The FIFO method does not use the beginning inventory costs in computing the cost per equivalent unit for the current period.

Name: The FIFO method does not use the beginning inventory costs in computing the cost per equivalent unit for the current period.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

The FIFO method uses the cost of the first units purchased in a period to calculate the cost of goods sold and ending inventory. Therefore, the beginning inventory costs are not used in computing the cost per equivalent unit for the current period.

The FIFO Method Does Not Use the Beginning Inventory Costs