Material Costing Methods: Fill In the Blanks

True Tamplin

Written by True Tamplin, BSc, CEPF®
Updated on March 25, 2022

1. A materials abstract is also known as a .

2. Materials should be used by the storekeeper against .

3. The first in, first out (FIFO) method of valuing material issues is suitable in times of .

4. The last in, first out (LIFO) method of valuing material issues is suitable in times of .

5. The average cost method of valuing material issues is suitable when .

6. The inflated price method of valuing material issue is suitable when .

7. The specific price method is regarded as the optimal method when .

8. The market price method is considered optimal when .

9. A bill of materials serves the purpose of .

10. A bill of materials is purposed in cost of a job.

Frequently Asked Questions

What is the First In First Out (FIFO) method in accounting?

The FIFO method is a way of accounting for inventory that assumes that the first items purchased are also the first items that will be sold.

Why is the FIFO method used?

The FIFO method works by tracking the cost of each item that is bought and then using those costs to calculate the cost of goods sold. This means that the first items that were purchased are also the first items that will be sold.

Why is the FIFO method used?

Why is the FIFO method used?

What are the drawbacks of using the FIFO method?

There are a few drawbacks of using the FIFO method, including it can be more expensive to implement than other methods, it can be more difficult to track than other methods, it may not be suitable for all businesses, and lastly, it is not always possible to use the FIFO method.

How does the FIFO method compare to other methods?

The FIFO method is one of the most commonly used methods for accounting for inventory. It is easy to use and understand, and it is widely accepted by accountants and other financial professionals. However, it can be more expensive to implement than other methods, and it may not be suitable for all businesses. Other methods that can be used to account for inventory include the weighted average method and the last in first out method.

True Tamplin, BSc, CEPF®

About the Author
True Tamplin, BSc, CEPF®

True Tamplin is a published author, public speaker, CEO of UpDigital, and founder of Finance Strategists.

True is a Certified Educator in Personal Finance (CEPF®), author of The Handy Financial Ratios Guide, a member of the Society for Advancing Business Editing and Writing, contributes to his financial education site, Finance Strategists, and has spoken to various financial communities such as the CFA Institute, as well as university students like his Alma mater, Biola University, where he received a bachelor of science in business and data analytics.

To learn more about True, visit his personal website, view his author profile on Amazon, or check out his speaker profile on the CFA Institute website.

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