All 5 Inventory Valuation (FIFO/LIFO/AVCO) questions
More in Inventory Valuation (FIFO/LIFO/AVCO)
What is the FIFO method of inventory valuation? How do FIFO, LIFO and AVCO differ during rising prices? What does 'lower of cost and net realisable value' mean (IAS 2)? Is LIFO permitted under IFRS, and why?
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Financial Accounting › Inventory Valuation (FIFO/LIFO/AVCO)

Work out closing inventory using AVCO.

Intermediate

Answer

Recalculate a weighted average cost per unit after each purchase and value issues/closing at that average.
10@2 + 10@4 = 60 for 20 units -> avg 3/unit; 8 units left = 24
Real-world example Bulk commodities are often valued at weighted average cost.
All 5 Inventory Valuation (FIFO/LIFO/AVCO) questions