Which of the Following Is an Assumption Under FIFO Process-Costing

question 119

Multiple Choice

Which of the following is an assumption under FIFO process-costing method?

• A) It assumes some of the higher-cost units are placed in ending work in process.
• B) It assumes that all the lower-cost units from the previous period in beginning work in process are the first to be completed and transferred out of the process.
• C) It assumes that unit inputs costs are constant and do not fluctuate in the short run.
• D) It assumes that the ending work in process consists of only the lower-cost current-period units.

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Definitions:

Liabilities

Financial obligations or debts that a company or individual owes to others, which need to be settled over time by transferring economic benefits.

Closed-End Funds

A type of investment fund with a fixed number of shares, traded on the stock exchange, unlike open-end funds which continuously issue new shares.

Premium

The amount by which the price of a financial instrument, such as an insurance policy or bond, exceeds its face value or nominal cost.

NAV

Net Asset Value; the total value of a fund's assets minus its liabilities, often used in the context of mutual funds.