# Avco

This topic contains 5 replies, has 4 voices, and was last updated by  auditfirm 5 years, 1 month ago.

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• kamran_bsh
Participant

In LIFO last items of inventory are issued to store first…….In FIFO first items are issued first…but, which items are issued to store in case of AVCO?

Anonymous

u chosoe item randomly in avco so item dosnt matter,,the whol thing is in the price
in fifo first out is not acording to to first item but according to the price of the first item,,the price comes in the ledger not the item
i hope i cud make it clear,,if not plz dont hesitate to contact me

John Moffat
Keymaster

LIFO is not in the syllabus – it is not accepted by IAS2

For AVCO ridwanua is correct. See the course notes for an example of it.

Anonymous

yah thats correct,,in tht case consider FIFO

auditfirm
Member

AVCO: irrespective of the item used, and because all the items would be assigned the same price (weighted average) for the entire mix, the position of the item used is irrelevant: consider 6pcs (@ \$1 each) and 4pcs(@ \$6 each) – all “in-stock”
AVCO: (6×1 + 4×6) / 10 = \$3 per unit
A stock removed will be valued @ \$3 per unit.

ex: Remove 8 units(out of 10): value = \$24
Remaining stock, say closing stock, = 2 x 3 = \$6
Hope am correct anyway?

auditfirm
Member

AVCO: irrespective of the item used, and because all the items would be assigned the same price (weighted average) for the entire mix, the position of the item used is irrelevant: consider 6pcs (@ \$1 each) and 4pcs(@ \$6 each) – all “in-stock”
AVCO: (6×1 + 4×6) / 10 = \$3 per unit
A stock removed will be valued @ \$3 per unit.

ex: Remove 8 units(out of 10): value = \$24
Remaining stock, say closing stock, = 2 x 3 = \$6
Hope am correct anyway?

Viewing 6 posts - 1 through 6 (of 6 total)

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