Question

Under the FIFO method, unit costs would: a) result from costs in the beginning inventory being added in with current period costs. b) contain some element of cost from the prior period. c) not contain some elements of cost from the prior period. d) not include costs incurred to complete beginning inventory.

Answer 1

Answer:

a) result from costs in the beginning inventory being added in with current period costs.

Explanation:

Because the FIFO means First In First Out

the beginning inventory AKA cost from prior period will be include to determinate the cost of the units that made first in. Then the remaining cost added to finish this units will be assing to calculate the cost of units under FIFO

example

100 units BI WIP $5,000

cost added to finish this units  $10,000

Total cost $15,000

units cost $15,000/100 = $150

If there are more units finsihed during the period, they may have a diferent units cost.