The First-In, First-Out Method Computes Unit Costs by

question 30

Multiple Choice

The first-in, first-out method computes unit costs by

• A)dividing total units by units completed this period.
• B)confining equivalent units to the work completed during the current period only.
• C)the standard-costing method.
• D)separately identifying the conversion costs of beginning and ending inventories.
• E)adding opening inventory units to work-in-process units and dividing by total cost.

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Definitions:

Firm

An organization that uses resources to produce goods or services for profit in an economic system.

Goods

Items or products that are produced to satisfy wants or needs of consumers. Goods can be tangible, like food and cars, or intangible, like services.

Services

Intangible and non-physical goods provided by individuals or companies, such as healthcare, education, and financial consulting.

Total Product

The total quantity of output produced by a firm or economy as a result of its production process.