Most process costing systems use weighted average process costs.Which of the following is a characteristic of weighted average process costs systems?
A)These systems account only for costs incurred during the current period.
B)These systems are not appropriate for environments that involve mass production.
C)The weighted average process cost system is required by GAAP.
D)These systems do not distinguish between the costs from the prior period and costs incurred during the current period.
E)None of the above is a characteristic of weighted average process costs systems.

Question

Quizplus · Accepted Answer

Weighted average process cost systems do not distinguish between the costs from the prior period and costs incurred during the current period. Instead, they calculate an average cost per unit by dividing the total cost to date by the total units produced to date. This average cost is then used to value both the units completed and the units in process. Options A, B, C, and E are all incorrect as they do not accurately describe the characteristics of weighted average process cost systems.

Most Process Costing Systems Use Weighted Average Process Costs