Fundamentals of Cost Accounting 3rd Edition by William N. Lanen, Shannon W. Anderson, Michael Maher

Exercise 22

Compute Costs per Equivalent Unit: FIFO Method

Refer to the data in Exercise 8-21.

Required

Compute the cost per equivalent unit for materials using the FIFO method.

Step 1 of 3

Equivalent units:

Equivalent units of production are an indication to show the work in process inventory at the end of an accounting period. The equivalent units are calculated for allocation of costs of process to the finished goods which are fully completed and transferred. It means converting the uncompleted production into completed units.