A distinct feature of the FIFO process-costing method is that the ________.
A) work done on beginning inventory before the current period is blended with the work done during the current period in the calculation of equivalent units
B) work done on beginning inventory before the current period is kept separate from the work done during the current period in the calculation of equivalent units
C) work done on ending inventory is kept separate from the work done during the current period in the calculation of equivalent units and is usually not included in the calculation
D) FIFO process-costing method is only minimally different from the weighted-average process-costing method

Question

Quizplus · Accepted Answer

In FIFO process costing, the work done on beginning inventory before the current period is kept separate from the work done during the current period in the calculation of equivalent units. This is because FIFO assumes that the oldest units, or those in beginning inventory, are completed or sold first. Therefore, it is important to keep track of the work done on beginning inventory separately.

A Distinct Feature of the FIFO Process-Costing Method Is That