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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?
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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 meLIFO 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.
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yah thats correct,,in tht case consider FIFO
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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?
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- Replies: 3
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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?
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