Under the first-in,first-out (FIFO)method,the cost of equivalent units of production is calculated by ________.
A) summing up only the transferred in costs of each department
B) combining beginning inventory costs with current period costs
C) considering only the transferred out costs of each department
D) accounting for beginning inventory costs separately from current period costs

Question

Quizplus · Accepted Answer

Under the FIFO method, the cost of equivalent units of production is calculated by accounting for beginning inventory costs separately from current period costs. This means that the cost of units that were started and completed during the current period are calculated separately from the cost of units that were started in the previous period and completed in the current period. Therefore, option D is the correct answer.

Under the First-In,first-Out (FIFO)method,the Cost of Equivalent Units of Production