Question

n computing the current period's manufacturing cost per equivalent unit, the FIFO method of process costing considers: (CPA adapted) A. only current period costs.B. current period costs plus cost of beginning work-in-process inventoryC. current period costs less cost of beginning work-in-process inventoryD. current period costs plus the cost of ending work-in-process inventory

Answer 1

Answer:

C. current period costs less cost of beginning work-in-process inventory

Explanation:

While calculating the current period manufacturing under FIFO method the cost of beginning work in process will be deducted as was incurred in previous period, for the current period only the current period cost will be considered.

Though the FIFO method is based on first in first out principle where opening inventory will be sold first, but the cost incurred earlier in previous period will not be considered.

Correct statement is C