Which statement best explains the weighted average cost flow assumption?
A)A method that uses the most recent costs in the calculation of cost of sales.
B)A method that uses the cost of goods available for sale divided by the number of units available for sale.
C)A method that assigns costs to inventories and cost of sales based on actual costs of each item.
D)A method that uses the oldest costs in the calculation of cost of sales.

Question

Quizplus · Accepted Answer

The weighted average cost flow assumption uses the cost of goods available for sale divided by the number of units available for sale to calculate the average cost per unit. This average cost is then used to assign costs to inventories and cost of sales.

Which Statement Best Explains the Weighted Average Cost Flow Assumption