AVCO

So I've had no problem with FIFO and LIFO. I've done the powerpoint on here regarding AVCO too and have tried some practice questions.

I understand how to do AVCO and how to work out the cost of the issues.

I just don't get how to carry on after an issue has been made to find the remaining balance after another receipt has occurred?

Thanks in advance! :)
AAT Level 3 :)

Comments

  • CeeJaySixCeeJaySix Well-Known Posts: 645Registered
    So you've got as far as:

    Receipt 2000 units @ £2 = £4000
    Receipt 1000 units @ £5 = £5000
    Subtotal 3000 units @ 9000/3000 = £3/unit

    Issue 1500 units @ £3/unit per subtotal = £4500
    Remaining = 3000 -1500 = 1500 units, also at £3 per unit per subtotal = £4500

    So now you just add your next receipt to that remainder.

    Remainder 1500 units @ £3 = £4500
    Receipt 2000 units @ £4.50 = £9000
    Subtotal 3500 units @ 13,500/3500 = £3.86/unit

    Any clearer?
  • amy256amy256 Posts: 32Registered
    Thank you everyone - much clearer now! :)
    AAT Level 3 :)
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