Inventory

gareth1985

Hi there,

after getting the £22 per kilo figure. I just don't know how to get those other figures. Please help.

Thanks,

Gareth

Vickie30

Hi Gareth,

I'll work all the way through so you can see the whole process if it helps.
So the total of the inventory is (500+1200+2000) = 3700 kilos.
Total prices are (£26x500=13000, £22x1200=26400, £21x2000=42000) = £81400.
As we are doing AVCO, you divide the total cost by the total kilos and you will get the £22 per kilo.
It then says there was an issue of 1800 kilos for production and you have worked out the cost per kilo above.
1800 kilos x £22 = £39600
You started with 3700 kilos in inventory, there was an issue of 1800 kilos for production (3700-1800), so you are left with 1900 kilos left in the inventory.

I hope this helps and makes sense!
Vickie

gareth1985

Hi Vickie,

that all makes perfect sense. Thank you so much for the help:)