An Assumption of the FIFO Process-Costing Method Is That ________

question 94

Multiple Choice

An assumption of the FIFO process-costing method is that ________.

• A) the units in beginning inventory are not necessarily assumed to be completed by the end of the period
• B) the units in beginning inventory are assumed to be completed first
• C) ending inventory will always be completed in the next accounting period
• D) no calculation of conversion costs is possible

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Definitions:

Planning Budget

A forward-looking budget that outlines the financial plans, objectives, and resources over a specific timeframe, often used for guiding the operations and evaluating performance.

Actual Results

The real outcomes or data recorded from operations or activities, compared to projections or budget expectations.

Net Operating Income

A company's income after operating expenses are deducted, but before income taxes and interest expenses are subtracted.

Flexible Budget

A budget that adjusts or varies with changes in the volume or activity level of a company.