Periodic weighted average cost
Periodic weighted average cost assigns a common unit cost based on the cost and quantity of goods available over a period. The resulting average is used to value issues and closing inventory for that period. If eight of the twenty units remain, closing inventory is 24 and twelve units issued have an assigned cost of 36.
Worked example
Ten units at 2 and ten at 4 give an average of 3 per unit.
Common mistake
Using the moving average after each receipt when the question asks for a periodic average.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | F1 | Supporting | July 2027–August 2028 |
| ACCA | F2 | Direct | July 2027–August 2028 |
| ACCA | FA | Direct | September 2026–June 2027 |
| ACCA | K1 | Direct | July 2027–August 2028 |
| FIA | FFA | Direct | September 2026–June 2027 |
Related terms
Also called: periodic AVCO