In Which Circumstance Is the FIFO Method More Likely to Be

question 13

Multiple Choice

In which circumstance is the FIFO method more likely to be preferred in determining the costs of processing?

• A) there are regularly little work-in-process inventories on hand.
• B) there are never any work-in-process inventories on hand.
• C) there are regularly substantial work-in-process inventories on hand.
• D) staff in the accounting department lack expertise and experience in costing.

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Definitions:

Manufacturing Business

A type of business that produces finished goods from raw materials by using various processes, machinery, and operations.

Financial Accounting

The field of accounting focused on the summary, analysis, and reporting of financial transactions related to a business.

Managerial Accounting

Refers to the process of identifying, measuring, analyzing, interpreting, and communicating information for the pursuit of an organization's goals.

Objective

A specific, measurable, achievable, relevant, and time-bound goal that drives strategic and operational planning.