Which costs should be included in the calculation of the cost per equivalent unit using the FIFO method of process costing?
A) Current period costs only
B) Current period costs plus those from beginning work-in-process inventory
C) Current period costs less those from beginning work-in-process inventory
D) Current period costs less those from ending work-in-process inventory

Question

Quizplus · Accepted Answer

The FIFO (First-In, First-Out) method of process costing includes only the costs incurred during the current period in the calculation of the cost per equivalent unit. It assumes that the units in the beginning inventory are completed first, so the costs associated with those units are not included in the calculation for the current period's costs.

Which Costs Should Be Included in the Calculation of the Cost