In General,the Ending Work-In-Process Inventory Value Computed Using First-In,first-Out (Fifo)will
In general,the ending Work-in-Process Inventory value computed using first-in,first-out (FIFO)will be the same as the ending value computed using weighted-average process costing.The two approaches will have different unit costs,so the costs assigned to ending WIP will differ.
It is possible for units in the beginning Work-in-Process Inventory to also be part of the ending Work-in-Process Inventory.If the time to complete a unit is longer than a month,it may be possible that not all units in beginning WIP would be completed during the month.
The more prices change,the greater the difference between the costs assigned to units transferred out using weighted-average costing and the costs assigned to units transferred out using first-in,first-out (FIFO).Weighted-average combines several periods' costs,so the larger the change,the greater the difference.
In general,weighted-average costing is simpler to use while first-in,first-out (FIFO)costing provides greater decision-making benefits to managers.Weighted-average is simpler since there is less attention paid to when units are completed.FIFO does a better job for cost control since it identifies the period better.