The FIFO method of computing equivalent units excludes the beginning inventory costs in computing the cost per equivalent unit for the current period.

Question

Quizplus · Accepted Answer

The FIFO method assumes that the first-in, first-out units are completed and transferred out before the beginning inventory units are processed. Therefore, the beginning inventory costs are not included in the current period's cost per equivalent unit calculation.

The FIFO Method of Computing Equivalent Units Excludes the Beginning