Vector Corporation Has Been Using an Incorrect Method in Accounting

question 21

True/False

Vector Corporation has been using an incorrect method in accounting for supplies expense.It can change to the correct method without filing 3115.

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Definitions:

Weighted-Average Method

A cost accounting method that calculates the cost per unit by combining the costs of two or more similar items in the inventory, and dividing the total cost by the total number of units.

Equivalent Unit

A concept used in cost accounting to express the amount of work done on inventory in terms of fully completed units.

Process Costing

An accounting methodology used in industries where production is continuous and costs can be assigned to specific processes or departments in the production cycle.

Weighted-Average Method

An inventory costing method that assigns the average cost of goods available for sale to both ending inventory and cost of goods sold.