Assume material is added at the beginning of a process, and the beginning WIP inventory is 30 per cent complete as to conversion costs. Using the FIFO method of costing, the total equivalent units for material for this process during this period is equal to
A) units started this period in this process.
B) units started this period in this process plus 70 per cent of beginning inventory.
C) beginning inventory this period for the process.
D) units started this period in this process plus the beginning inventory.

Question

Quizplus · Accepted Answer

Under the FIFO method, the equivalent units for materials are equal to the units started this period because materials are added at the beginning of the process, and thus, all units started will have materials costs regardless of their stage of completion for conversion costs.

Assume Material Is Added at the Beginning of a Process