The Use of the FIFO Method Would Result in the Quantity

question 57

Multiple Choice

The use of the FIFO method would result in the quantity schedule of a company's production report showing

• A)units transferred out as one amount with no distinction made for beginning stock.
• B)units transferred out as two amounts-one for beginning stock and the other for units started and completed during the month.
• C)units transferred out as two amounts-one for units completed during the period and one for ending stock.
• D)units transferred out as three amounts-one for beginning stock, one for units started and completed during the period, and one for ending stock.

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Definitions:

Weighted Average

A calculation method that takes into account the varying degrees of importance of the numbers in a data set, resulting in a figure that represents the overall effect.

Average Unit Cost

The total cost of goods available for sale divided by the number of units available for sale, used to value inventory.

Weighted Average

A calculation that takes into account the varying degrees of importance of the numbers in a data set, giving more weight to some numbers than others.