No. We cant use Average Costing if WIP is installed.

Under Average Costing, the unit cost is derived by

averaging the value of all receipts of that item to inventory,
on a per unit basis. Each receipt to the inventory updates
the unit cost of the received item. Issues from inventory
uses the current average cost as the unit cost.
(Transaction value + Current
inventory value)
Average
Cost= --------------------------------------------------(Transaction qty. + current on-hand
qty.)
Transaction Value = PO price x Transaction qty.
Q13 Under Standard Costing, how does the system get
the unit cost?
We have to define unit cost of all the items as standard
cost and the difference between the defined standard cost
and the actual cost are recorded as variances. Under
Standard Costing we can share costs across multiple
organizations and hence the standard costs will be defined
only in one organization. The Cost Master Organization
will normally be the Item Master Organization.
Q14 What is Purchase Price Variance (PPV)?

When using the standard Costing, the difference between

the defined standard cost and the actual cost are recorded
as Purchase Price Variance (PPV)
PPV = (PO Unit Price Standard unit Cost) x Qty.
Received.
Purchase Price Variance is not used for Average
Costing.
Q15 What is Invoice Price Variance (IPV)?
Invoice Price Variance (IPV) is the difference between PO
unit price and the actual invoice unit price multiplied by the
quantity invoiced.
IPV
=
Invoiced

(PO Unit Price Invoice unit Price) x Qty.

FIFO is also known as Layer Costing in Oracle. It is because items are received and grouped together
sharing same cost. FIFO layers are maintained at Item/Org/Cost Group level.