Question

Give formulae of Weighted-Average Method / Equivalent Units Of Production .

Answer 1

The Weighted-Average Method calculates the cost of production for units completed and in process by assigning an average cost. Equivalent Units of Production (EUP) are calculated to represent complete units from the given costs. In chemistry, formula mass is also calculated using a similar weighted average of atomic masses.

Step-by-step explanation:

The Weighted-Average Method in cost accounting assigns the average cost of production to both ending inventory and units produced during a period. This method involves calculating Equivalent Units of Production (EUP), which represent the number of complete units that could have been produced given the total amount of costs incurred for the work done. This is useful in process costing situations where production is continuous, and it can be challenging to identify discrete units.

To calculate the Equivalent Units of Production using the Weighted-Average Method, the formula is:

• Equivalent Units of Production = Units Completed and Transferred Out + Weighted Average of Units in Ending Work in Process

For example, if a firm calculates the cost for goods in terms of average total cost, they would take the total cost and divide by the total output, which relates to the concept of average costs being typically U-shaped on a graph.

In the context of chemistry and calculations for chemical compounds, the weight of a formula unit or the formula mass of a substance can be calculated by summing the average atomic masses of the atoms in the formula, which is analogous to calculating a weighted average for different isotopes in a bulk sample or grade point averages (GPAs) in academics.

Answer 2

The specific formula for using the Weighted-Average Method or Equivalent Units of Production in cost accounting is not provided, but it involves calculating a weighted average of costs over units produced. This is similar to the method of finding the weight of a formula unit in chemistry by totaling atomic masses.

Step-by-step explanation:

The formula for calculating Weighted-Average Method or Equivalent Units of Production in cost accounting is not stated explicitly in the provided material.

However, to derive equivalent units of production using the weighted-average method, you combine the costs of the beginning inventory and the costs of production during the period and then divide this total cost by the equivalent units of output (both from the beginning inventory and the units produced during the period).

In the context of chemistry, you can calculate the weight of a formula unit by summing up the atomic masses of all the atoms in a substance's formula. This is akin to how businesses calculate average total costs by dividing total costs by total output. Both concepts rely on a similar principle of calculating a weighted average.