Equivalent units of production for a process costing system using the FIFO method are equal to:
A) Units completed during the period + Equivalent units in the ending work in process inventory.
B) Units transferred out + Equivalent units in ending work in process inventory + Equivalent units in beginning work in process inventory.
C) Units started and completed during the period + Equivalent units in the ending work in process inventory.
D) Units completed during the period and transferred out.

Question

Quizplus · Accepted Answer

The FIFO method assumes that units in the beginning work in process inventory are completed before those started during the current period, so the equivalent units in the beginning work in process inventory are added to the units transferred out and the equivalent units in the ending work in process inventory to get the total equivalent units of production.

Equivalent Units of Production for a Process Costing System Using