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When Using the Weighted Average Method to Calculate Cost Per

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When using the weighted average method to calculate cost per equivalent unit, the cost is calculated as current period costs / equivalent units for total work.


Definitions:

Activity-Based Costing

A method of allocating overhead and indirect costs to specific products or projects based on their use of resources.

Activity Rate

The cost driver rate that is used to assign activity costs to products or services based on their consumption of the activity.

Cost Pools

Groups of individual costs combined to allocate costs more efficiently.

Activity-Based Costing

A costing method that assigns costs to products or services based on the activities they require, aiming for more accurate product costing.

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