Opening inventory.. 5000
Purchases 2000
Closing inventory 6000
How is that we calculate average inventory is it 5000+6000÷2 ?
ACCA Forums
FRAverage inventory
If you just want the average inventory the purchases,cost of goods sold and other related figures are irrelevant to the calculation in question.The average inventory is usually calculated as a simple mean average of opening and closing inventory.Of course, the "normal" level of inventory held may be much higher or lower than this calculation indicates.
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