Asked by Karla Reyes on Apr 28, 2024
Verified
Describe the weighted average method used in process costing and explain how the unit costs are calculated.
Weighted Average Method
An inventory valuation method that assigns a weighted average cost to each unit of inventory, taking into account both the cost of goods available for sale and the number of units available.
Unit Costs
The cost incurred to produce, store, and sell one unit of a product or service.
- Comprehend the idea of equivalent units and their utilization in process costing, highlighting the distinctions between the FIFO and weighted average methodologies.
- Comprehend the steps involved in the process costing system and how costs are accumulated and assigned.
Verified Answer
CK
chandra kharelMay 01, 2024
Final Answer :
The weighted average method is a process costing method that averages the cost of opening WIP inventory and current production costs to determine the cost of completed production and closing WIP.
The cost per equivalent unit for both direct material and conversion is calculated by dividing the total direct material cost by the total equivalent units
The cost per equivalent unit for both direct material and conversion is calculated by dividing the total direct material cost by the total equivalent units
Learning Objectives
- Comprehend the idea of equivalent units and their utilization in process costing, highlighting the distinctions between the FIFO and weighted average methodologies.
- Comprehend the steps involved in the process costing system and how costs are accumulated and assigned.
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