The total value of material divided by the total quantiy of stock
abrar
a. It results in accurate ongoing inventory b. It lets the company incur adjustment costs on a monthly rather than annual basis c. It allows the company to look for and correct ongoing discrepancies
Risk assessment can be simply described as the carefully examination carry out to avoid any hazard that could cause harm to the workers,management and the environment at large.But method statement details the way work process is to be completed in a safely way.
The modern usages are: -- relative wealth (a man of means) -- the method by which something is accomplished (the end justifies the means) -- the plural of the arithmetic term meaning an average (means of two number sets)
simple random sampling method
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.
Weighted Average
Weighted Average
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.
Majority of the companies are following weighted average method to value inventories. In India, the Income Tax authorities only allow FIFO & Weighted Average Method.
The techniques of inventory control are as follows:- 1. First In First Out Method(FIFO) 2.Last In First Out Method(LIFO) 3.Highest In First Out Method(HIFO) 4.Base Stock Method 5.Simple Average Method 6.Weighted Average Method
in weighted average method we assigns the weight to the averages while in average methods we dnt do this
no, FIFO, LIFO, and weighted-average method are cost flow assumptions these assumptions bear no relation to the physical flow of goods; they are merely used to assign costs to inventory units.
The computation of equivalent units under FIFO method differs from weighted average method in two ways. First the units transferred out figure is divided into two parts. One part consists of the units from beginning inventory that were completed and transferred out, and the other part consists of the units that were both started and completed during the current period. Second full consideration is given to the amount of work expended during the current period on units in the beginning work in process inventory as well as units in the ending inventory. Thus, under the FIFO method, it is necessary to convert both beginning and ending inventories to an equivalent unit basis. For the beginning inventory, the equivalent units represent the work done to complete the units; for the ending inventory, the equivalent units represent the work done to bring the units to a stage of partial completion at the end of the period ( the same as with the weighted average method). The formula for computing equivalent units of production is more complex under FIFO method than under weighted average method. On December 31, 2006 Company appropriately changed to the FIFO cost method from The weighted-average cost method for financial statement and income tax purposes. the change will result in a $70,000 increase in the beginning inventory @January 1, 2006. Assuming a 40 Percent income tax rate, the cumulative effect of this accounting change reported for the year ended December 31,2006, is A. 700,000 B. 420,000 C. 350,000 D. 280,000 My Answer is 700,000/40%=280,000 Is any one have idea abourt FIFO cost method. Help is really appreciated
Average Cost Method: Under this method average cost is calculated by following farmula:Average cost of unit= Total cost of inventory / total number of units
The weighted average method is advantageous because it smoothens out fluctuations in inventory costs by incorporating both old and new cost data. It is simple to calculate and less subject to distortions from extreme price changes. This method is also compliant with generally accepted accounting principles (GAAP).