Final answer:
The major advantage of the weighted average method of inventory costing is that it assigns equal importance to all units in inventory, thereby smoothing out cost fluctuations. This makes it a useful and stable method for businesses that handle large quantities of similar items.
Step-by-step explanation:
The question asks about the advantages of the weighted average method of inventory costing. The correct choice that represents an advantage of the weighted average method is B. It assigns equal importance to all units in inventory.
The weighted average method smooths out fluctuations in costs over a period by giving each unit the same weight, or importance, when calculating the average cost. Unlike some other methods, such as First-In, First-Out (FIFO) or Last-In, First-Out (LIFO), the weighted average method does not provide priority to the costs of earlier or later purchases, but instead consolidates them into a single, averaged cost.
This method is particularly useful for businesses with large volumes of similar items in inventory, as it simplifies accounting and inventory management. It also mitigates the impact of dramatic cost swings, making cost of goods sold and ending inventory values more stable over time.
However, it does not reflect the most recent costs as current ending inventory valuation like FIFO might, nor does it ignore the cost of goods sold as choice D incorrectly suggests. Therefore answer is C. It reflects the most recent costs in ending inventory.