Chapter 5, 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