The cost per equivalent unit under the FIFO method of process costing is equal to the cost added during the period divided by the equivalent units of production for the period.

Question

Quizplus · Accepted Answer

This is correct. Under the FIFO method of process costing, the cost per equivalent unit is determined by dividing the total cost added during the period (direct materials, direct labor, and overhead) by the equivalent units of production completed during the period. This formula takes into account the costs of all units that were partially or fully completed during the period, regardless of whether they were started before or after the beginning of the period.

The Cost Per Equivalent Unit Under the FIFO Method of Process