The primary difference between the FIFO And Average method of process costing lies in the treatment of the cost of the beginning work in process inventory .in the FIFO method the cost of the beginning work in process inventory is kept separate from the cost of production of the current period. in the FIFO method each department is regarded as separate accounting unit.
where as Average costing method e cost of the beginning work in process inventory is not kept separate from the cost of production of the current period. in this method average unit cost of the product are computed although exist there beginning inventory cost .