Respond that the following statements are TRUE or FALSE:

1) If a business operates in an industry that experiences significant cost changes, it would be to its benefit to use the first-in, first-out (FIFO) method.

2) Significant changes in costs are not exposed in a first-in, first-out (FIFO) method.

3) Under the first-in, first-out (FIFO) method, prior period costs are not merged with current period costs.

4) Under the first-in, first-out (FIFO) method, the cost of equivalent units of production are calculated by:

A) Summing up only the transferred in costs of each department.

B) Combining beginning inventory costs with current period costs.

C) Considering only the transferred out costs of each department.

D) Accounting for beginning inventory costs separately from current period costs.

5) Which of the following is used to calculate the number of units to account for under the first-in, first-out (FIFO) method of inventory valuation of process costing?

A) To account for = Beginning balance + Started and completed + in process

B) To account for = Beginning balance + Amount transferred in

C) To account for = Beginning balance + in process

D) To account for = Beginning balance + Started and completed