The cost per equivalent unit under the first-in, first-out 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. The FIFO method assumes that the earliest units worked on during the period are the first to be completed and transferred out, so the cost added during the period is divided by the equivalent units of production for the period to arrive at the cost per equivalent unit.

The Cost Per Equivalent Unit Under the First-In, First-Out Method