Asked by Logan Robinson on Jul 29, 2024
Verified
Assigns the same value to all inventory units
A)FIFO
B)LIFO
C)Weighted average
Weighted Average
A calculation that takes into account the varying weights or importance of different elements in a data set, often used in accounting and inventory management.
Inventory Units
The quantity of individual items or products that a company holds in stock at any given time.
Cost Flow Assumption
An accounting method used to value the cost of goods sold and ending inventory.
- Develop an understanding of the various assumptions on cost flow and their application in the valuation of inventory stocks.
Verified Answer
ZK
Zybrea KnightAug 03, 2024
Final Answer :
c
Explanation :
Weighted average assumes that all inventory units have the same value by taking the total cost of goods available for sale and dividing it by the total number of units available for sale. This results in a weighted average cost per unit that is assigned to inventory.
Learning Objectives
- Develop an understanding of the various assumptions on cost flow and their application in the valuation of inventory stocks.