ECONOMICS

Detailed explanation-1: -The weighted average costing method treats beginning inventory costs and the accompanying equivalent output as if they belong to the current period. This is done for costs by adding the manufacturing costs in BWIP to the manufacturing costs incurred during the current period.

Detailed explanation-2: -Weighted average cost accounting calculates the average cost of all inventory units available for sale over a respective period, which is then used to determine the cost of goods sold and the value of ending inventory. This method tends to be the simplest to derive.

Detailed explanation-3: -How to calculate inventory weighted average cost. To calculate the weighted average cost, divide the total cost of goods purchased by the number of units available for sale.

Detailed explanation-4: -The first-in-first-out (FIFO) method keeps beginning inventory costs separate from current period costs and assumes that beginning inventory units are completed and transferred out before the units started during the current period are completed and transferred out.