The Cost Per Equivalent Unit Under the FIFO Method of Process

question 80

True/False

The cost per equivalent unit under the FIFO method of process costing is equal to the cost of beginning work-in-process inventory plus the costs added during the period,all divided by the equivalent units of production for the period.

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Definitions:

Direct Labour-Hour

A measure of the amount of time a worker spends on a specific task or production activity.

Raw Materials Purchased

The total cost of primary materials acquired for use in the manufacturing process within a specific accounting period.

Direct Materials

The raw materials that are directly used in the production of a product, easily traceable to that product.

Cost of Goods Manufactured

The total production cost incurred by a company to manufacture products in a specific period, including costs of materials, labor, and overhead.