FIFO Assumes All but One of the Following

question 88

Multiple Choice

FIFO assumes all but one of the following:

• A)Sell the old inventory first
• B)Recent cost assigned to inventory not sold
• C)Sell the new inventory first
• D)Cost flow tends to follow physical flow
• E)None of these

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Definitions:

Machine Hour

A unit measure representing the operation of one machine for one hour, used in costing and operational efficiency analysis.

Plant Expansion

A process by which a company enlarges its operational capacity or adds to its production capabilities, possibly by acquiring more space, machinery, or buildings.

Total Amounts

The full quantities or sums reached by counting, calculating, or combining all parts.

Variable Costs Per Unit

Costs that vary directly with the level of production or volume of goods produced, altering according to the amount produced.