The Weighted-Average Method of Process Costing Differs from the FIFO

question 22

Multiple Choice

The weighted-average method of process costing differs from the FIFO method of process costing in that the weighted-average method:

• A)can be used under any cost flow assumption.
• B)does not require the use of predetermined overhead rates.
• C)keeps costs in the beginning inventory separate from current period costs.
• D)does not consider the degree of completion of units in the beginning work in process inventory when computing equivalent units of production.

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Definitions:

Income From Operations

Another term for operating income, representing profit from a company's regular business activities but excluding extraordinary items and expenses like taxes and interest.

Service Department Charges

Expenses allocated to the production or service departments, originating from support departments for costs incurred.

Operating Expenses

Costs associated with the normal operations of a business, excluding the costs of goods sold, such as rent, utilities, and payroll.

Total Service Department Charges

The collective costs charged by service departments within an organization for their services to other departments.