The weighted-average method

Acalculates an average unit cost by dividing the total cost of goods sold by the total units sold.
Bcalculates an average unit cost by dividing the total cost of goods available for sale by the total units of goods available for sale.
Ccalculates an average unit cost by adding the total cost of goods available for sale to the total units of goods available for sale.
Dnone of the above

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01-02-2017
Business

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The weighted-average method

Acalculates an average unit cost by dividing the total cost of goods sold by the total units sold.
Bcalculates an average unit cost by dividing the total cost of goods available for sale by the total units of goods available for sale.
Ccalculates an average unit cost by adding the total cost of goods available for sale to the total units of goods available for sale.
Dnone of the above

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brockrohn brockrohn · Answer 1 · 2017-02-10T10:00:26-05:00

The weighted average method is used to assign the average cost of production to a product. Weighted average costing is commonly used in situations where:

Inventory items are so intermingled that it is impossible to assign a specific cost to an individual unit.The accounting system is not sufficiently sophisticated to track FIFO or LIFO inventory layers.Inventory items are so commoditized (i.e., identical to each other) that there is no way to assign a cost to an individual unit.