Which of the following statements comparing the two alternative methods of proce

Question

Which of the following statements comparing the two alternative methods of process costing is FALSE?

a) When there is no beginning WIP inventory, the weighted-average method and the FIFO method will result in the same cost of goods manufactured.

b) When there is some beginning WIP inventory, the weighted- average method will result in greater equivalent units of outputs to be included for the cost per equivalent unit calculation than those under the FIFO method.Total costs to be accounted for under the FIFO method will be smaller than those under the weighted-average method.

c) Total costs to be accounted for under the FIFO method will be smaller than those under the weighted-average method.

d) The equivalent units in the ending WIP inventory will be the same under the FIFO and weighted- average methods.

Explanation / Answer

When there is no beginning WIP inventory, the weighted-average method and the FIFO method will result in the same cost of goods manufactured, When there is some beginning WIP inventory, the weighted- average method will result in greater equivalent units of outputs to be included for the cost per equivalent unit calculation than those under the FIFO method and The equivalent units in the ending WIP inventory will be the same under the FIFO and weighted- average methods all are true.

But Total costs to be accounted for under the FIFO method will be smaller than those under the weighted-average method is False.

so answer is c) Total costs to be accounted for under the FIFO method will be smaller than those under the weighted-average method.

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