The method of calculating equivalent units where the costs assigned to the beginning inventory of work-in-process are combined with the current periods costs of production and the degree of completion of the beginning units is ignored is the:

Question

Quizplus · Accepted Answer

The method described in the question is the weighted average method. This method combines the costs of beginning inventory with the costs of production incurred during the current period, and then divides the total cost by the equivalent units of production to calculate the cost per unit. Unlike the first-in-first-out (FIFO) and last-in-first-out (LIFO) methods, the weighted average method does not separate the costs of beginning inventory from the costs incurred during the current period. Therefore, option B is the correct choice.

The Method of Calculating Equivalent Units Where the Costs Assigned