Week 2 Posts - 11. What is the difference between the...

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11. What is the difference between the average cost method and the first in, first out cost method (FIFO)? The average cost method values ending inventories by using an average unit cost, computed by taking the cost of beginning work in process and adding it to current period production costs, and then dividing it by the total equivalent production for the period. His procedure is commonly used and is under a process cost accounting system. FIFO is also an inventory costing method, but assumes that materials issued are taken from the oldest materials in stock. Instead of using an average price as the average cost method does, FIFO uses costs at the earliest prices paid for the materials in stock and the ending inventory is valued at the most recent purchase price. 12. How would you define each of the following? a. joint products-At times two or more products can actually be produced from the same manufacturing process. These two products are primary objects of the process. b. by-products- Sometimes other smaller products are made from the manufacturing of
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This note was uploaded on 11/29/2009 for the course ACC ACC300 taught by Professor Jones during the Spring '09 term at Central Pennsylvania.

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