Weighted Average Method: Under this method, the average cost of goods produced, is ascertained by assigning weights to the goods and dividing the total of the sum of the products of weights and cost incurred by the total finished goods manufactured. If there are goods that are not complete then equivalent units of production are determined for such goods. Equivalent units of production are the representation of one unit of finished goods for every unit of unit of unfinished goods or goods that are in progress. To Discuss: Meaning of the term equivalent units of production when weighted average method is used

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Novak supply company a newly formed corporation , incurred the following expenditures related to the land , to buildings, and to machinery and equipment. abstract company's fee for title search $1,170 architect's fee $7,133 cash paid for land and dilapidated building thereon $195,750 removal of old building $45,000 LESS: salvage $12,375 $32,625 Interest on short term loans during construction…

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Chapter 4, Problem 7Q

To determine

Weighted Average Method:

Under this method, the average cost of goods produced, is ascertained by assigning weights to the goods and dividing the total of the sum of the products of weights and cost incurred by the total finished goods manufactured.

If there are goods that are not complete then equivalent units of production are determined for such goods.

Equivalent units of production are the representation of one unit of finished goods for every unit of unit of unfinished goods or goods that are in progress.

To Discuss:

Meaning of the term equivalent units of production when weighted average method is used

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