If materials are added at the end of the process and assuming no spoilage, under FIFO process costing, the equivalent units will always be equal to the number of units transferred out during the period.

Question

Quizplus · Accepted Answer

Under FIFO process costing, the equivalent units are calculated by multiplying the number of units transferred out during the period by the percentage of completion at the end of the period. If materials are added at the end of the process, then the units transferred out during the period will have been completed 100%, so the equivalent units will be equal to the number of units transferred out.

If Materials Are Added at the End of the Process