Question

The two categories of completed units needed in the first-in-first-out (FIFO) method are:

a. units completed during the current period and ending work-in-process units.
b. units started and completed during the current period and beginning work-in-process units.
c. units completed during the current period and beginning work-in-process units.
d. units started during the current period and ending work-in-process units.

Answer 1

The correct categories of completed units in the FIFO method are units started and completed during the current period along with beginning work-in-process units.

Step-by-step explanation:

The two categories of completed units needed in the first-in-first-out (FIFO) method are: units started and completed during the current period and beginning work-in-process units. Therefore, the correct answer is option b: units started and completed during the current period and beginning work-in-process units. When using the FIFO method in process costing, the costs of the earliest units in the work-in-process are the first ones to be transferred out. This means the costs associated with the beginning inventory are allocated first, and any additional costs incurred during the period are allocated to the units started and completed during the period.