ECONOMICS

Detailed explanation-1: -Under the FIFO method, we will calculate equivalent units for 3 things: Units completed from beginning work in process, units started and completed this period and units remaining in ending work in process.

Detailed explanation-2: -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.

Detailed explanation-3: -Process costing is used when a single product is made on a continuous basis. The units produced are identical. Job order costing is used when different jobs are worked each period. Process costing accumulates manufacturing costs (raw material, direct labor and manufacturing overhead) by processing department.

Detailed explanation-4: -Normal Output = Units introduced – Units of normal loss Normal Cost of Normal Output = Total Cost – Scrap value of Normal Loss.