The weighted-average method merges unit costs from different accounting periods, obscuring period-to-period comparisons.

Question

Quizplus · Accepted Answer

The weighted-average method calculates an average unit cost by dividing total costs by total units. This method does not distinguish between costs incurred in different accounting periods and merges them into one average cost. This makes it difficult to compare unit costs or cost of goods sold from one period to another.

The Weighted-Average Method Merges Unit Costs from Different Accounting Periods