During fluctuation in prices in the market which method of pricing material issue is preferred ........

Costing - Phase (I & II) Basics of Cost Control and Analysis

Download Solution PDF

During fluctuation in prices in the market, which method of pricing material issue is preferred:

First in First Out (FIFO)

Last in First Out (LIFO)

Simple Average Method

Weighted Average Method

छोटे Courses बड़े Results

Master Basics of Cost Control and Analysis

Prepare through Micro-courses

Try Now

Explanation:

During fluctuation in prices in the market, Weighted Average Method is preferred. Weighted average method gives due weights to quantity purchased at each price while calculating the average price. It is calculated by dividing total cost of materials in stock by total quantity of materials in stock.

Weighted average price=

Total cost of material in stock/total quantity of that stock.