Since FIFO excludes prior-period work and costs, it is necessary to create three categories of completed units.

Question

Quizplus · Accepted Answer

FIFO (First-In, First-Out) method focuses on the work done and costs incurred in the current period only, but it does not require creating three categories of completed units. It typically involves two main categories: units completed and transferred out, and units in ending work in process.

Since FIFO Excludes Prior-Period Work and Costs, It Is Necessary