Avco

This topic contains 5 replies, has 4 voices, and was last updated by avatar auditfirm 4 years, 3 months ago. This post has been viewed 114 times

Viewing 6 posts - 1 through 6 (of 6 total)
  • Author
    Posts

  • Avatar of kamran_bsh
    kamran_bsh
    Member
    • Topics: 17
    • Replies: 4

    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?


    Avatar of ridwanua
    Anonymous
    • Topics: 0
    • Replies: 3

    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


    Avatar of John Moffat
    John Moffat
    Keymaster
    • Topics: 3
    • Replies: 5508

    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.


    Avatar of ridwanua
    Anonymous
    • Topics: 0
    • Replies: 3

    yah thats correct,,in tht case consider FIFO


    avatar
    auditfirm
    Member
    • Topics: 0
    • Replies: 3

    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?


    avatar
    auditfirm
    Member
    • Topics: 0
    • Replies: 3

    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)

You must be logged in to reply to this topic.