Economic Order Quantity and AVCO method

Daniel E
Daniel E Registered Posts: 28 Regular contributor ⭐
Another of the pratice questions I've come across asks to complete an inventory record using the AVCO method of issuing and valuing inventory with the new Economic Order Quantity that has been worked out earlier in the question.

The opening balance (of the inventory record) presented in the question is 250 quantity, Total cost £162,500. However in the answers the opening balance is 250 quantity, Total cost £11,100.

Is this just a mistake? Why would the opening balance be any different than before?



  • SandyHood
    SandyHood Registered, Moderator Posts: 2,034 mod

    I looked at the 2 secure assess sample exams and at the word document sample exam. You appear to be referring to another yet another exam question.

    In the absence of a way of looking at your question, only the data you have given is available.
    So, I agree with you.

    If the opening balance is 250 units it must be valued using what ever unit cost is given in both the question and in the answer.
    Stick with your own confidence in your own accuracy and don't let "wrong answers" dent that confidence.
  • MarkT
    MarkT Registered Posts: 302
    This kind of reminds me of what one of my tutors has said with a consistency "Trust your first instinct - its usually right"
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