BAR Process Costing · Updated November 2026
Weighted-Average vs FIFO Process Costing: Which Work Is This Period's?
Weighted-average blends beginning inventory with current work. FIFO isolates work performed this period.
Weighted-average
Combines beginning work in process with current-period work when calculating equivalent units and cost per equivalent unit.
FIFO
Separates prior-period work already contained in beginning WIP from the work performed during the current period.
Ending WIP
Both methods consider the stage of completion of ending work in process, but the treatment of beginning WIP differs.
Exam strategy
Label beginning WIP, units started, units completed, ending WIP, and completion percentages before doing arithmetic.
The takeaway
Choose the method first, then calculate equivalent units. Mixing weighted-average and FIFO logic is the fastest way to get the problem wrong.
Related Summit guides
FAQ
Does weighted-average blend beginning WIP costs with current costs?
Yes.
Does FIFO isolate current-period work more explicitly?
Yes.
Do both methods use equivalent-unit concepts?
Yes.