To simplify calculations under FIFO, spoiled units are accounted for as if they were started in the current period.

Question

Quizplus · Accepted Answer

This statement is true. Under FIFO, the first units purchased or produced are assumed to be the first units sold or used, so any spoiled units are accounted for as if they were part of the current period's production or purchase, and assigned the current period's cost.

To Simplify Calculations Under FIFO, Spoiled Units Are Accounted for as If