Using the average cost method of process costing,the computation of manufacturing cost per equivalent unit considers:
A)Current costs only.
B)Current costs plus cost of beginning work in process inventory.
C)Current costs plus cost of ending work in process inventory.
D)Current costs less cost of beginning work in process inventory.

Question

Quizplus · Accepted Answer

The average cost method of process costing considers both current costs and the cost of beginning work in process inventory in the computation of manufacturing cost per equivalent unit. This is because the method assumes that the costs incurred during the current period are added to the costs of the beginning work in process inventory to determine the total costs to be accounted for.

Using the Average Cost Method of Process Costing,the Computation of Manufacturing