Requirement $2.$ Explain any difference between the cost of work completed and transferred out and the cost of ending work in process inventory in the assembly department under the$$ weighted$-$average method and the FIFO method. Should

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managers choose the$$ weighted$-$average method or the FIFO$$ method? Explain briefly.

Explain any difference between the cost of work completed and transferred out and the cost of ending work in process inventory in the assembly department under the$$ weighted$-$average method and the FIFO method.

The FIFO ending work in process inventory is

$$

$$

higher

lower

than the$$ weighted$-$average ending inventory. This is because FIFO assumes that all the

$$

$$

higher$-$cost current$-$period units

higher$-$cost prior$-$period units

lower$-$cost current$-$period units

lower$-$cost prior$-$period units

in work in process are the first to be completed and transferred out while ending work in process consists of only the

$$

$$

higher$-$cost current$-$period units.

higher$-$cost prior$-$period units.

lower$-$cost current$-$period units.

lower$-$cost prior$-$period units.