A finished ACC-360 Topic 7 process costing method comparison example, running weighted average and FIFO on one department's month and tracing the difference between them to opening inventory. Searches like "acc 360 topic 7 assignment example", "acc360 topic 7 sample" and "acc-360 topic 7 example" land here.
What a finished ACC-360 Topic 7 process costing method comparison looks like
The finished comparison uses one set of facts and two schedules. The department began the month with 4,000 cases half cooked, started 40,000, finished 36,000 and ended with 8,000 half cooked. Materials go in at the start and cost $3.00 a case in both months, so the materials figures agree under both methods. Conversion does not: the opening cases carry last month's $2.10 per equivalent unit, while this month's cost is $2.50 after a wage increase. Weighted average blends the two into $2.48, sending $197,280 to finished goods. FIFO finishes the opening cases first and costs everything else at $2.50, sending $197,200. The example traces the $80 gap to the $800 of cheaper conversion in opening inventory, and it says which figure a manager judging this month should read.
How an ACC-360 Topic 7 example is structured
The comparison is arranged so the two methods share everything except the step where they differ. It opens with the department's facts in one table: physical units, completion percentages and costs from the opening inventory and from the month. The weighted-average schedule is run next in full, from equivalent units to the assignment of cost. FIFO is then run in full as well, splitting completed cases into those that came from opening inventory and those started and finished this month. The results sit in adjacent columns, with a line confirming that both assign the same $231,200 in total. The $80 difference is explained arithmetically, from the opening conversion cost, and the conditions that would make the gap large are named. The comparison closes by recommending which method's unit cost belongs in this month's performance report, and why that reader needs it.
One set of facts for both
Units, completion percentages and costs appear once at the top, so every difference between the schedules can only come from the method itself.
Equivalent units counted both ways
Weighted average counts 40,000 conversion units and FIFO counts 38,000, because FIFO excludes the half of the opening cases already cooked last month.
Totals agree before details are compared
Both schedules assign exactly $231,200, which shows the methods divide the same cost between finished and unfinished cases rather than disagreeing about the amount.
The gap traced to its source
Opening inventory holds 2,000 conversion units at $0.40 below this month's rate, and that $800 is what the two methods place differently.
When the difference grows large
A bigger opening inventory or a sharper change in input prices would widen the gap, and the example names both conditions rather than implying it is always small.
The number for the monthly review
FIFO's $2.50 shows the wage increase in full, so the example recommends it for judging this month while noting that either method is acceptable for inventory.
Where marks go in ACC-360 Topic 7
Running one method correctly and describing the other in words forfeits the comparison the assignment is asking for. A FIFO schedule that counts all 36,000 completed cases as this month's work, forgetting that half of each opening case was cooked last month, counts old work as new and understates the current conversion rate. Schedules whose totals disagree have an error in one of them, since both methods must assign identical cost. Papers that report an $80 difference and call it negligible without explaining where it came from have measured the gap without understanding it. Claiming FIFO is simply more accurate misreads the choice, since each method answers a different question. Omitting the recommendation on which unit cost belongs in the performance report leaves the comparison without a reader who could use it.
Get an ACC-360 Topic 7 example written to your instructions
Send the ACC-360 Topic 7 instructions and your classroom rubric, with the department data your case provides. We return a custom example written to those criteria, with both methods run in full on the same facts, totals agreed, the difference traced to its source, the conditions that enlarge it named and a recommendation made, in 24 to 48 hours. The first request is free.
ACC-360 Topic 7 questions, answered
What makes the equivalent unit counts differ?
The two methods disagree about what counts as this period's work. Weighted average treats opening inventory as though it were started this month, so its equivalent units include work done last month. FIFO counts only the work performed this month, which means finishing the opening cases, completing the cases started this month and partly processing the ending cases. The FIFO count is therefore smaller whenever opening inventory was partly complete.
Which method do companies actually use?
Both appear, and the choice often follows what managers want from the report. Weighted average is simpler and smooths month-to-month swings. FIFO isolates the current period's cost, which suits performance evaluation, particularly when input prices are moving. For inventory reporting the difference is usually small. An assignment normally names the method it wants; where it asks for a recommendation, tie it to who reads the unit cost.
Should the example explain a small difference?
Yes, especially a small one. The size of the gap here is itself a finding, since it shows how little the method matters when opening inventory is modest relative to the month's production. Explaining exactly where the $80 comes from also shows command of both schedules. A paper that dismisses the difference without tracing it leaves the marker unsure whether the writer understands why it exists at all.