The average costing method in process costing disregards the ending inventory assuming that direct material costs and conversion costs are pertaining to the immediate next period.

Question

Quizplus · Accepted Answer

The average costing method in process costing takes into account the ending inventory by averaging the total costs of the current period with the costs of the previous period, thus assuming that the ending inventory contains costs both from the current and previous period.

The Average Costing Method in Process Costing Disregards the Ending