The key difference between weighted-average and FIFO process costing methods is the handling of the partially completed:
A)Beginning direct materials inventory.
B)Ending direct materials inventory.
C)Beginning work-in-process inventory.
D)Ending work-in-process inventory.
E)Beginning finished goods inventory.

Question

Quizplus · Accepted Answer

The key difference between weighted-average and FIFO (First-In, First-Out) process costing methods lies in how they handle the beginning work-in-process inventory. The weighted-average method combines the beginning work-in-process inventory with the current period's work, treating them as a single, homogeneous unit. In contrast, the FIFO method separates the costs of the beginning work-in-process inventory from the costs of the current period's production, allowing for a more precise calculation of the costs associated with units completed and transferred out during the period.

The Key Difference Between Weighted-Average and FIFO Process Costing Methods