Questions:
• The production report of a company using the FIFO cost method likely would show goods transferred from a department in two parts--one part consisting of units from the beginning inventory completed and transferred, and the other part consisting of units that were both started and completed during the month.
• In computing the cost per equivalent unit on the production report, costs in the beginning work in process inventory are kept separate from current period costs when the FIFO method is used.
• A major advantage of the FIFO method is that it allows managers to judge the performance of the current period independently of the performance of the prior period.
• The production report of a company using the FIFO cost method likely would show goods transferred from a department in two parts--one part consisting of units from the beginning inventory completed and transferred, and the other part consisting of units that were both started and completed during the month.
• In computing the cost per equivalent unit on the production report, costs in the beginning work in process inventory are kept separate from current period costs when the FIFO method is used.
• A major advantage of the FIFO method is that it allows managers to judge the performance of the current period independently of the performance of the prior period.