Methods of Valuation of Inventories Homework Help
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What is an inventory?
Every company who belongs to a manufacturing sector always keeps certain stock of material in case any situation arises in near future. That stock is represented as inventory stock. Valuation of those inventories is as necessary as maintaining it. By valuation we can understand the quantity quality and price range at which company could earn more profit. In this article for Methods of Valuation of Inventories homework Help we discuss the factors that help the managers to evaluate inventories.
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Methods for inventory valuation
The following methods illustrated by our Methods of Valuation of Inventories homework Help writers are widely used
1. FIFO (First In First Out) Method: as per this method, the items present in the inventory are sold as per their purchase serials. The items purchased first would be sold first. This method as our Methods of Valuation of Inventories homework Help article suggests is a sheer example for physics of goods flow.
2. LIFO (Last In First Out) Method: this one being the opposite of FIFO sells the product that has been purchased at the end. The newer inventory is cleared first. As soon the prices of the items or goods increase the cost of items sold becomes higher.
3. Average cost method: in this article for Methods of Valuation of Inventories homework Help, the following formula is a significant one for the stated purpose.
Weighted Average Cost Per Unit= Total Cost of Goods in Inventory
Total Units in Inventory
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