Blueprint Problem: Weighted-average and FIFO process costing

The Effect of Work in Process Inventories on Process Costing

Process costing becomes more complicated when there are both beginning and ending work in process (BWIP and EWIP) inventories. The costs stored in BWIP were incurred during the prior period. A decision must be made about how to handle those costs.

There are two methods for treating BWIP costs when computing the unit cost for the current period: the weighted average costing method and the FIFO costing method. The primary difference between the two methods is in the calculation of cost per equivalent unit