weighted Average

Hello

Please can you explain the slight difference as i am currently studying F3 with Kaplan (ACCA). In the Kaplan study text book it gives me an example of weighted average and they do the calculations slightly different to how you do them in the videos. This is their way –

31 Dec – opening = 5 units at a cost of $3.50 per unit

Purchases

2 Jan – 5 units at £4.00 per unit
4 Jan – 5 units at 5.00 per unit
6 Jan – 5 units at 5.50 per unit

Sold 7 units for $10.00 per unit on 5 Jan

31 Dec OP INV 5 x 3.50 17.50
2 Jan Purchases 5 x 4.00 20.00

10 x (37.5/10) 3.75 37.50

4 Jan Purchases 5 x 5.00 25.00
15 (62.5/15) 4.17 62.50
5 Jan Sold (7) 4.17 (29.19)
8 33.31
6 Jan Purchased 5 x 5.50 27.50
13 60.81

Closing Inventory Value – 60.81

However, when i do it the same way that you have done it in your videos i get 60.86 but the next part of the question in the book asks me to do an income statement which means the closing inventory figure is going to be out by 0.05p. Please can you advise

Your way

31 Dec OP INV 5 x 3.5 17.50
2 Jan Purchases 5 x 4.00 20.00
10 37.50

4 Jan Purchases 5 x 5.00 25.00
15 (62.5/15) 4.17 62.50
5 Jan Sold (7)
8 33.36
6 Jan Purchases 5 x 5.50 27.50
13 60.86

Closing Inventory Valuation 60.86