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Managerial Accounting

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Weighted Average Method Process Costing Cost per EU Theory

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The computation of equivalent units (EU) examines partially completed units and converts them to a measure in terms of completed units. Then the cost per EU is computed using costs and the EU effort expended.

The weighted average method

A

adds beginning costs with costs incurred during the period to get the cost per EU.

B

adds costs in the ending inventory to costs in the beginning to get cost per EU.

C

adds costs in the beginning and ending inventory to the costs incurred during the period to get the cost per EU.

D

considers only the costs incurred for completed and transferred out units when computing the cost per EU.