Question

In order to compute equivalent units of production using the FIFO method of process costing, work for the period must be broken down to units: a. completed during the period and units in ending inventory. b. started during the period and units transferred out during the period. c. completed from beginning inventory, started and completed during the month, and units in ending inventory. d. processed during the period and units completed during the period.

Answer 1

The correct option here is C) units in the beginning work in progress period which were completed , units which were started and completed, and units in ending work in progress.

Step-by-step explanation:

FIFO ( First in first out ) method is used to take out the cost per unit when doing process costing, in this method it is assumed that the inventory which were not finished during the beginning of period would be first completed and then new shall be started.

To take out the equivalent cost per unit under the FIFO method we will add the units which were completed in the beginning plus units which were started and completed during the period and plus the units which are left in ending work in progress.