Question

The FIFO method of computing equivalent units includes the beginning inventory costs in computing the cost per equivalent unit for the current period. True or False True False

Answer 1

Answer:

True

Explanation:

FIFO or first in first out is a system in business used to compute the equivalent costs per unit of inventory. The first product in the inventory, in FIFO, is the first product to be sold or opened for sales.

Although the cost of a unit separates the beginning inventory costs in computing the cost per equivalent unit from current production cost, it is for the current sales period of the first batch of inventory.