The first-in, first-out (FIFO)method creates better month-to-month cost comparisons than the weighted-average method:
A)as it does not recognize transferred in units from other processes.
B)when there are substantial quantities of units in process at the end of the period.
C)because it merges costs from the prior period with the current period.
D)as it is used by industries that do not experience significant cost changes.

Question

Quizplus · Accepted Answer

The FIFO method provides better cost comparisons when there are substantial quantities of units in process at the end of the period because it separates the costs of the current period from those of the previous period, allowing for a clearer comparison of current period costs.

The First-In, First-Out (FIFO)method Creates Better Month-To-Month Cost Comparisons Than