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dear john sir, hope you doing well. I have general doubt that in your notes you have weighted average inventory valuation. but I used the Kaplan textbook for further reference as you told us to not only depend on notes. in Kaplan, there are two subparts of weighted average inventory valuation. first is, periodic weighted average and the second is a continuous weighted average inventory valuation.
i want to know if i can use any method even if its mentioned in the question. because in BPP exam kit question 6.19 someone asked you about this you told to go with your method and he is getting answer 2007 but using specific method mentioned in the kaplan which is periodic weighted average i am getting same answer as given in BPP 6.19. so i can use any method or specific one
It would appear that both BPP and Kaplan are using the wrong terminology.
The periodic weighted average calculates the weighted average of all purchases during the period.
The continuous weighted average calculate the average after each purchase and each sale. That is the one for the exam and is the way that I explain in my lectures and is the way question 6.19 is answered. This is the way to answer any question in the exam (unless obviously the question asks for a FIFO calculation) 🙂
yes sir i got the point but if the questions comes exam and it is asked for the periodic weighted average and if i go with your explanation like in 6.19 so the difference in 2007 and 2057 will be the issue
I do not know where you are getting 2,057 from.
If a question in the exam asks for the AVCO approach then you use the method in my lectures and the correct answer is $2,007 (which is the answer in the BPP Revision Kit).
Any question in the exam will either ask you to use AVCO or to use FIFO.
Hi John. The answer for that question is in fact 2057. That’s why I did not understand the question as I got 2007.
sir I got the answer 2057 from the periodic weighted average method explained in the Kaplan textbook. specifically.
The periodic weighted average cost
With this inventory valuation method, the average cost per unit is calculated
based upon the cost of opening inventory plus the cost of all purchases made
during the accounting period. This method of inventory valuation is calculated at
the end of an accounting period when the total quantity and cost of purchases
for the period is known.this ^ is what is explained in Kaplan I used this.
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