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in weighted average method we assigns the weight to the averages while in average methods we dnt do this
The advantages of using weighted average cost is that it is consistent, the formula is very simple to use and their is less paperwork. This method, however, makes it difficult to follow the ups and downs of the market if prices change frequently.
Weighted average inventory valuation method is method in which inventory purchased at any price is put together to calculate one price for allocation in contrast to FIFO or LIFO.
Weighted average method which requires to use the weighted average cost per unit of inventory at the time of each sale.
Majority of the companies are following weighted average method to value inventories. In India, the Income Tax authorities only allow FIFO & Weighted Average Method.
Weighted Average
First stock should consumed first and then other stock. Majority of the companies are following weighted average method to value inventories. In India, the Income Tax authorities only allow FIFO & Weighted Average Method.
Thiessen Polygon method is a weighted average mean method used to calculate average rainfall. The catchment area is divided into subcatchments using the Thiessen polygon method.
The advantages of using weighted averages are that it smooths out fluctuations due to statistical outliers. The disadvantage is that this gives a uniformity in the statistics and can make it difficult to project trends.
The total value of material divided by the total quantiy of stock
A method of inventory accounting in which the oldest remaining items are assumed to have been the first sold. In a period of rising prices, this method yields a higher ending inventory, a lower cost of goods sold, a higher gross profit (assuming constant price), and a higher taxable income. Also called FIFO.Method in calculation in which the weighted averagezzor the period is the cost of the goods available for sale divided by the number of units available for sale. When the perpetual inventory system is used, the weighted average method is called the moving average method.
What is weighted average atomic number