Final answer:
The weighted-average costing method is an accounting practice that averages the costs of all inventory units for cost per unit calculations, typically excluding the costs of direct materials in beginning inventory based on the premise that these materials are added at the start of the production process.
Step-by-step explanation:
The weighted-average costing method is an inventory costing method used in accounting that averages the costs of all inventory units, including those in beginning inventory and those purchased or produced during the period,
when calculating the cost per unit. According to the given statement, costs of direct materials in beginning inventory are not included in the cost per unit computation in this costing method.
This exclusion is based on the assertion that direct materials are typically added at the beginning of the production process, so the costs associated with the beginning inventory's direct materials may not be indicative of the costs incurred for materials used in the current period.
To illustrate, let's imagine a company with a beginning inventory of 100 units at $5 each and purchases additional materials during the month totaling 200 units at $6 each.
If direct materials are added at the start of production, the weighted-average cost per unit would only account for the purchase of the 200 units during the current period, excluding the cost of the direct materials from the beginning inventory.
The total cost for the current period would be (200 units x $6), which, when divided by the total number of units produced, would determine the weighted-average cost per unit.