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I have a question i’m attempting in my Kaplan exam kit which talks about Periodic weighted average cost in relation to valuation of inventory. Its given as Total value of Inventory divided by Total units. Is this the same as Cumulative weighted average cost, as when i use the method shown in lectures to find the value of the closing inventory im getting a different answer to the one given in the exam kit. Any clarification on this would be appreciated. Thank you 🙂
No it isn’t the same as the cumulative weighted average, and it is the cumulative weighted average that is the important one.
The periodic weighted average is the total value of the purchases during the period divided by the total number o units purchased during the period.
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