In order to compute equivalent units of production using the FIFO method of process costing,work for the period must be broken down to units:

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The FIFO method assumes that units from beginning inventory are completed first, followed by units that were started and completed during the period, and finally units in ending inventory. Therefore, in order to compute equivalent units using the FIFO method, work for the period must be broken down into all three components: units completed from beginning inventory, units started and completed during the month, and units in ending inventory.

In Order to Compute Equivalent Units of Production Using the FIFO