The weighted-average method of process costing differs from the FIFO method of process costing in that the weighted-average method:
A) does not consider the degree of completion of beginning work in process inventory when computing equivalent units of production.
B) considers ending work in process inventory to be fully complete.
C) will always yield a higher cost per equivalent unit.
D) All of the above.

Question

Quizplus · Accepted Answer

The weighted-average method does not consider the degree of completion of beginning work in process inventory when computing equivalent units of production. The FIFO method, on the other hand, does consider the degree of completion of beginning work in process inventory. The other options (B and C) are not correct, as the weighted-average method does not assume that ending work in process inventory is fully complete, nor does it always yield a higher cost per equivalent unit.

The Weighted-Average Method of Process Costing Differs from the FIFO