Methods used to compute equivalent units of production

Various methods are used to compute equivalent units of production under the weighted average and FIFO methods. One of the most common variations is the following EUP calculation for weighted average:

Units transferred (whole units)+ Ending work in process (equivalent units)= Weighted average EUP (equivalent units of production)

Once the weighted average EUP figure is available, the FIFO equivalent units can be quickly derived by subtracting the equivalent units in beginning work in process inventory that had been produced in the previous period: 

Weighted average EUP- Beginning work in process (equivalent units)= FIFO EUP (equivalent units of production)

This computation is appropriate for the following reason: The weighted average method concentrates on the units that were completed during the period as well as the units that were started but not completed during the period. Unlike FIFO, the weighted average method does not exclude the equivalent units that were in beginning inventory. Thus, to convert from weighted average to FIFO, simply remove the equivalent units produced in the previous period from beginning work in process.