When calculating the cost per equivalent unit in process costing,what is the difference between the weighted-average and FIFO methods?
A) With FIFO, prior period costs are not combined with current period costs.
B) With FIFO, prior period costs are combined with current period costs.
C) With weighted-average, prior period costs are not combined with current period costs.
D) There is no difference between the two methods.

Question

Quizplus · Accepted Answer

The difference between the weighted-average and FIFO methods when calculating the cost per equivalent unit in process costing is that with FIFO, prior period costs are not combined with current period costs. This is because the FIFO method assumes that the units worked on during the current period are completed and transferred out before any units from the previous period. The weighted-average method, on the other hand, combines the costs of the current period with the costs of the previous period to calculate the average cost per equivalent unit.

When Calculating the Cost Per Equivalent Unit in Process Costing,what