QUESTION 47 Which of the following is true of the weighted average method of process costing? A. In computing equivalent units of production, it considers all work done during the previous periods. B. It better matches ending inventory costs with current costs than the FIFO method. C. It results in higher net income than the FIFO method. D. In computing the cost per equivalent unit of production, it considers only costs incurred in the current period. E. If there is no ending work in process, it results in the same amount of cost for completed units as the FIFO method does.
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
QUESTION 47
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Which of the following is true of the weighted average method of
process costing ?A. In computing equivalent units of production, it considers all work done during the previous periods.
B. It better matches ending inventory costs with current costs than the FIFO method.
C. It results in higher net income than the FIFO method.
D. In computing the cost per equivalent unit of production, it considers only costs incurred in the current period.
E. If there is no ending work in process, it results in the same amount of cost for completed units as the FIFO method does.
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