The closer a company moves toward lean manufacturing processing, the more differences in unit costs between average costing and FIFO will be reduced.

Question

Quizplus · Accepted Answer

This is because lean manufacturing reduces inventory levels, which means there is less variation in unit costs over time. As a result, the differences between average costing and FIFO (which relies on the assumption that the oldest inventory is sold first) will become less significant.

The Closer a Company Moves Toward Lean Manufacturing Processing, the More