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m.ro23
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Joined: 13 Mar 2010
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Posts: 17

Posted: 03 Jun 2010 at 01:19 \| IP Logged

To calculate an equivalent unit cost by using FIFO method, we use a current cost only for numerator and use not only (unites completed – Beg WIP) and ending WIP completed but also BEG WIP to be completed for denominator. I think the level of the numerator and denominator does not match in this formula. Can anyone explain?

SoonerCPA
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Joined: 25 Feb 2010
Location: United States
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Posts: 159

Posted: 03 Jun 2010 at 09:24 \| IP Logged

To calculate the equivalent units under the FIFO method you do three things:

1) Take your Beg WIP units x % needed to complete

2) Take your finished products - Beg WIP units

3) Take your ending WIP units x % completed

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m.ro23
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Posted: 03 Jun 2010 at 20:55 \| IP Logged

Thank you,

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