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.

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Tamuna Bolkvadze · Accepted Answer

Final Answer : A, Explanation :  The weighted-average method does not consider the degree of completion of beginning work in process inventory when computing equivalent units of production, which is different from the FIFO method. The weighted-average method computes equivalent units of production based on the weighted-average cost per unit of the work completed during the current period, whereas the FIFO method computes equivalent units of production based on the units completed and transferred out of the process during the current period and the units remaining in ending work in process inventory. The fact that the weighted-average method does not consider the degree of completion of beginning work in process inventory is the key difference between the two methods. The other choices (B and C) are incorrect because they do not accurately describe the differences between the two methods.

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