ECONOMICS

Detailed explanation-1: -Most companies use either the weighted average or first-in-first-out (FIFO) method to assign costs to inventory in a process costing environment. The weighted average method. includes costs in beginning inventory and current period costs to establish an average cost per unit. The first-in-first-out (FIFO)

Detailed explanation-2: -Which one of the following process costing methods combines both current and prior costs in determining cost per equivalent unit? Weighted-average method.

Detailed explanation-3: -In the weighted average cost method, the cost of goods available for sale is divided by the number of units available for sale and is commonly used when inventory items are so melded or identical to each other that it is impossible to assign specific costs to single units.

Detailed explanation-4: -FIFO is an inventory valuation method where the first purchased goods are sold first. Weighted average method uses the average inventory levels to calculate inventory value. FIFO is the most commonly used inventory valuation method. Usage of weighted average method is less compared to FIFO.

Detailed explanation-5: -What is FIFO costing? In simplest terms, FIFO (first-in, first-out) costing allows you to track the cost of an item/SKU based on its cost at purchase order receipt, and apply this cost against each shipment of the item until the receipt quantity is exhausted.