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Weighted Average Method - Work in Progress
While this method is employed, all costs of production are considered in assigning costs to inventory. The method puts together opening work in production inventory costs and cost of process. It mixes the costs of previous period along with those of recent period in determining costs per unit.
Beneath this method, equivalent units are calculated given as:
Equivalent Units = Units completed and Transferred + Ending work in progress inventory: (percent (%) completion)
Cost per Equivalent Unit = Previous Period costs + Current period costs
In beginning working process /Equivalent units of work done
Beneath weighted average approach, we do not differentiated the "units started and completed in the current period" from the 'units completed and transferred ' and the 'Ending working period'.
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