A major advantage of using the FIFO process-costing method is that:
A) FIFO makes the unit cost calculations simpler
B) in contrast with the weighted-average method, FIFO is considered GAAP
C) FIFO provides managers with information about changes in the costs per unit from one period to the next
D) in the period of rising prices, it leads to lower operating income and lower tax payments, saving the company cash and increasing the company's value

Question

Quizplus · Accepted Answer

FIFO (First-In, First-Out) provides managers with information about changes in the costs per unit from one period to the next because it only considers the costs of the most recent period, making it easier to analyze and understand the impact of current period costs on the overall cost structure.

A Major Advantage of Using the FIFO Process-Costing Method Is