Under the first-in, first-out method of product costing, equivalent units of production consider units in the beginning inventory as if they were started and completed during the current period.

First-In, First-Out Method

An inventory valuation method where the earliest items added to inventory are the first ones considered sold.

Equivalent Units

A measure used in process costing that converts partially completed goods into an equivalent number of fully completed units.

Production Consideration

Factors or aspects taken into account during the manufacturing process, including efficiency, cost, and quality.