The use of the FIFO method would result in a company's process cost report showing
A) units transferred out as one amount with no distinction made for beginning inventory.
B) units transferred out as two amounts: one for beginning inventory and the other for units started and completed during the month.
C) units transferred out as two amounts: one for units completed during the period and one for ending inventory.
D) units transferred out as three amounts: one for beginning inventory, one for units started and completed during the period, and one for ending inventory.

Question

Quizplus · Accepted Answer

The FIFO method assumes that the units in beginning inventory were completed first, followed by the units started and completed during the period. Therefore, the process cost report using the FIFO method would show units transferred out as two separate amounts: one for beginning inventory and the other for units started and completed during the month. This method allows for a clearer distinction between the costs incurred for the units in beginning inventory versus the costs incurred for the units started and completed during the period.

The Use of the FIFO Method Would Result in a Company's