help ecr fifo and avco

hi, can anyone tell me how you'd figure out the stock issue method if the stock record card is only partly completed?

Comments

  • visha
    visha Registered Posts: 218 ? ? ?
    When ever there is a stock card / stock valuation method evaluation question, look at the first issue on the card to find which method was used.

    Referring to June 2008 paper you will notice that first stock was issued at £2.9250. (take note here of 4 decimal places
    very important that you work to 4 decimal places as well)

    This can’t be LIFO because the last stock received was at £3.0000

    Is it then FIFO? – Calculate the stock price for the balance b/f - £16,800 divide by 6000 kg =£2.8000

    Stock was issued at £2.9250 and therefore can not be FIFO. It MUST be AVCO.

    Confirm this by dividing the total stock cost by total quantity. £46,800 divide by 16,000 = £2.9250

    Now use AVCO method. AVERAGE METHOD

    As the name suggests, when ever you issue the stock, use the above formula to find out what the average cost of the stock in the store is. Then issue the stock to production at that price.
  • joerd84
    joerd84 Registered Posts: 56 ? ? ?
    ah right thanks alot, makes sense now
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