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Goods available for sale is 415 units with a total cost of $3,394.00. If we divide $3,394.00 by 415, we get a weighted average cost of $8.18 (rounded) per unit. The rest of the calculation is very simple at this point. The company sold 245 units. We will use $8.18 as the cost of each unit, therefore the total cost of goods sold is
13 May 2017 The weighted average cost per unit is therefore $257.78 ($116,000 ? 450 units.) The ending inventory valuation is $45,112 (175 units ? $257.78 weighted average cost), while the cost of goods sold valuation is $70,890 (275 units ? $257.78 weighted average cost).
The main difference between weighted average cost accounting, LIFO, and FIFO methods of accounting is the difference in which each method calculates inventory and cost of goods sold. The weighted average cost method uses the average of the costs of the goods to assign costs.
Average cost method (AVCO) calculates the cost of ending inventory and cost of goods sold for a period on the basis of weighted average cost per unit of inventory.
Inventory valuation methods and costing can have a significant impact on your small business. See an You would then use this number as your cost of ending inventory and the cost of goods sold for your accounting purposes. So your weighted average cost would be the $5000 cost divided by the 300 basketballs.

Cost of Goods Sold (COGS) by the Weighted Average Method: There is an alternative way to calculate Cost of Goods Sold (COGS). The calculation is based on the average cost per unit of inventory for particular accounting period. The following formula is used to calculate Average Cost per Unit under the Weighted Average
Inventory Valuation Methods. First-in First-out (FIFO) Last-in First-out (LIFO) Moving Average Method Weighted Average Method Dollar Value LIFO. FIFO, LIFO, Perpetual, Periodic. Under FIFO, it is assumed that items purchased first are sold first. Under LIFO, it is assumed that items purchased last are sold first. Perpetual

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February 2018