ECONOMICS

Detailed explanation-1: -Under the weighted-average method, the equivalent units used to compute the unit costs of ending inventories relate only to work done during the current period. In calculating cost per equivalent unit under the weighted-average method, prior period costs are not combined with current period costs.

Detailed explanation-2: -To calculate the weighted average cost, divide the total cost of goods purchased by the number of units available for sale. To find the cost of goods available for sale, you’ll need the total amount of beginning inventory and recent purchases.

Detailed explanation-3: -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-4: -To use the weighted average model, one divides the cost of the goods that are available for sale by the number of those units still on the shelf. This calculation yields the weighted average cost per unit-a figure that can then be used to assign a cost to both ending inventory and the cost of goods sold.

Detailed explanation-5: -Option b is the correct answer. The job order costing calculates the unit cost of production in one job by averaging the total cost of the job, and process costing also calculates it by using the average computed by dividing the total cost of production in one process with the total units produced by the process.