Unit 5

Sallo14 wrote: »

HI, I am revising stock valuation chapter and i am a bit confused about how to calculate a weighted average cost when there is a price of selling units provided.
Normally I would use the average price calculated on last transaction, but now I have no clue.
I would appreciate if someone could help me.
Thank u in advance.

Hi

the AVCO is for calculating the cost per unit of units to be issued and not bought as far as i am concerned? do you mean selling price = price units were brought in?

If you have

Qty 100 price total 52000 this means an AVCO of 520 per piece

Lets say that the next day 100 more are bought in at a price of 540 each , then you have 200 quantity and 52000+540000 = 106000 which would make your AVCO for any unit issued 106000/200= 530


hope this helps

Here's my bash at it.... no idea if its right

date - Purchased - sales - aver.unit cost - units - total cost

3/4.......80.............................5.20...............80.........416
9/4..........................(50)......(5.20).............(50).......(260)
................................................................30.........156
10/4......100............................................................550
...........................................5.43...............130........706
15/4........................(50)......(5.43).............(50).......(271.50)
................................................................80.........434.40
17/4........................(60)......(5.43).............(60).......(325.80)
................................................................20.........108.60
20/4......100............................................................580
...........................................5.74...............120.......688.60
28/4........................(70)......(5.74).............(70)......(401.80)
...........................................5.74...............50.........287