Which of the Following Statements About the Weighted Average and FIFO

question 37

Multiple Choice

Which of the following statements about the weighted average and FIFO methods is true?

• A) Equivalent units of production cannot be the same under the two methods.
• B) Equivalent units of production under FIFO are always greater than or equal to equivalent units of production under the weighted average method.
• C) Equivalent units of production under FIFO will equal equivalent units of production under the weighted average method only when there are no units in ending inventory.
• D) Equivalent units of production for ending inventory units are the same under the two methods.

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Definitions:

Variable Overhead Rate Variance

This refers to the difference between what the variable overhead costs were expected to be versus what they actually were, measured against the standard cost of production.

Manufacturing Overhead

The indirect factory-related costs that are incurred when a product is manufactured, including costs such as maintenance, utilities, and quality control.

Standard Costing System

An accounting method that uses standard costs for product cost planning and control, involving setting predetermined costs for manufacturing activities.

Variable Overhead Efficiency Variance

Measures the difference between the actual hours taken to produce an item and the standard hours expected, multiplied by the variable overhead rate per hour.