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Why are sales for the continuous AVCO method valued at the most current average cost per unit, until next purchase when new AC is calculated, and not their selling price?
If the total cost is to be reduced, it is reduced by the sales revenue (selling price x units sold)?
The sales always appear in the SOPL at selling price.
The cost of sales is always the cost of what was sold. How the cost is calculated depends on the method the company uses to calculate the cost (FIFO or AVCO).
When goods are sold, the cost of the goods remaining in inventory is calculated by subtracting the cost of what was sold from what the cost of the goods in inventory was before the sale.
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