ECONOMICS

Detailed explanation-1: -If the units in the beginning Work-in-Process Inventory are greater than the units in the ending Work-in-Process Inventory, then the units transferred out are: more than the units started during the period.

Detailed explanation-2: -Equivalent units for a process costing system using the FIFO method would be equal to: a. units completed during the period, plus equivalent units in the ending work in process inventory.

Detailed explanation-3: -Costs of units started and completed: you will take the equivalent units calculated for units started and completed x the cost per equivalent unit for materials, labor and overhead (or conversion). The sum of these 3 will be the cost of units completed and transferred which is also known as cost of goods manufactured.

Detailed explanation-4: -The first-in-first-out (FIFO) method keeps beginning inventory costs separate from current period costs and assumes that beginning inventory units are completed and transferred out before the units started during the current period are completed and transferred out.