ECONOMICS

Detailed explanation-1: -The method in which issue prices of material is computed by dividing total purchase cost of material in stock with total quantity in stock weighted average method.

Detailed explanation-2: -What is Weighted Average Cost (WAC)? In accounting, the Weighted Average Cost (WAC) method of inventory valuation uses a weighted average to determine the amount that goes into COGS and inventory. The weighted average cost method divides the cost of goods available for sale by the number of units available for sale.

Detailed explanation-3: -Periodic Weighted Average Method: In the weighted average method, the issue rate is worked out by taking the quantity and price of each lot of receipt. In the Periodic Weighted Average the rate of issue is not calculated at each lot of receipt but only periodically, usually at interval of one month.

Detailed explanation-4: -Here we detail about the following eight methods of pricing of issue of materials: (1) Replacement Cost Method, (2) Fixed Price Method, (3) Standard Price Method, (4) Inflated Price Method, (5) Highest in First Out (HIFO) Method, (6) Next-in-First Out (NIFO) Method, (7) Moving Average Method and (8) Base Stock Method.

Detailed explanation-5: -Average cost method assigns a cost to inventory items based on the total cost of goods purchased or produced in a period divided by the total number of items purchased or produced. Average cost method is also known as weighted-average method.