Question

For a given process/department, if there is no beginning work-in-process, both the weighted average and first-in first out (FIFO) methods of process costing result in the same amount for which of the following?

I. Equivalent units of production for materials

II. Cost per equivalent unit for conversion

III. Cost of completed units

IV. Cost of ending work-in-process

	A.	I and III
	B.	I, II, III, and IV
	C.	II and IV
	D.	I and II
	E.	I, III, IV

Which of the following is true of the weighted average method of process costing?

	A.	It better matches ending inventory costs with current costs than the FIFO method.
	B.	If there is no ending work in process, it results in the same amount of cost for completed units as the FIFO method does.
	C.	It results in higher net income than the FIFO method.
	D.	In computing equivalent units of production, it considers all work done during the previous periods.
	E.	In computing the cost per equivalent unit of production, it considers only costs incurred in the current period.

Answer 1

Answer 1. The correct option would be Option D, ie
Equivalent units of Production for materials and
Cost per equivalent unit for Conversion remains same.

This is because in Closing WIP, Weighted Average Method asks to take 100% completion which is not in FIFO.

Answer 2. A. False:- FIFO Method matches ending inventory costs with current costs rather than weighted average method which takes the current price for all.

B. True: The statement is True if there is No Closing Stock then Complted Units is same as FIFO.

C.False: FIFO Method gives Higher net Income

D.False: This happens in FIFO Method.

E. True : Weighted Average Method considers the cost of current period.