The FIFO method of process costing

• does not commingle the beginning inventory and current period production activity.

• determines

>- equivalent units of production by adding to the equivalent units of the beginning in¬ ventory completed in the current period the units started and completed plus equiv¬ alent units in the ending inventoiy.

unit cost (per cost component) by dividing current cost by equivalent units.

>- transferred-out value by adding to the cost of beginning inventory the cost necessary to complete the beginning inventory plus the cost of the units started and completed in the current period.

»- ending inventory value by multiplying the equivalent units of each cost component by the related cost per equivalent unit.

LO.1