![]() ![]() The solution to this question requires you to compute the relevant weighted average price as shown belowĮxplanation of inventory Issuance-Weighted Average Method above Using the above information, determine the monetary value of closing inventory at the end of August under Weighted Average method. Polite Notice (PN) company ltd provided you with the following inventory details for the month of August 2021 NB 3: A simplified way of determining the weighted average issuance price is to consider the prices and corresponding units of inventory associated with the receipts of inventory and apply Pick and Drop methodology as you match the inventory balances. NB 2: Determination of Balance Brought Down (Inventory)=Previous inventory monetary Balance Less Monetary Value of Issued Inventory. NB 1: The computed weighted average price only applies when an issue is being made. On the same breath, if a new batch of inventory is received, its corresponding price and quantity is included in the computation of the new price.įormula for weighted average price is expressed as follows Formula This means that if a batch of inventory is exhausted on issuance, its price and corresponding quantity is excluded in the computation of the new price to be used in the proceeding inventory issuance. It entails determination of a new weighted average/mean price to be used for issuance in every inventory issuance transaction that takes place in the business.įIFO Method is followed when selecting the price and quantity to include and the one to exclude in the computation. Weighted average method as the name suggests, is the simple average whereby some weights in terms of number of corresponding units to prices are incorporated in computing the issuing price. Weighted Average Inventory Valuation Method Definition Compute inventory monetary value using weighted average method.Define the term weighted average inventory valuation method.The learner/user of this article will be able to This article is guided by the following 2 specific objectives. Specific Objective Definition Weighted Average Inventory Valuation Method Example Specific Objective s ![]() Material Inventory Valuation Procedure-Weighted Average Inventory Valuation Method ![]()
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |