Which inventory method calculates unit cost by dividing total cost of goods available for sale by total units available for sale?
ASpecific Identification Method
BLIFO Method
CFIFO Method
DWeighted Average Cost Method
Explanation
* Weighted Average Cost = Total Cost of Goods Available for Sale / Total Units Available for Sale.
* Smooths out price fluctuations during inflationary or deflationary cycles.
* Simple to compute under periodic inventory systems.
Exam Relevance
- Topic: Financial Accounting
- Subtopic: Inventory Accounting
No Comments