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In the average cost formula used in a periodic inventory system, the same weighted average cost per unit is used to calculate all of the goods sold during the period.

Average Cost Formula

A method used for inventory valuation, determining the cost of goods sold and ending inventory by calculating the weighted average of all purchases and manufacturing costs.

Periodic Inventory System

An accounting system that updates the inventory balance once at the end of the accounting period, using physical counts and purchase records.

  • Learn about the outcomes of utilizing various inventory cost approaches like FIFO, average cost, and specific identification under several market circumstances.
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Dairosse RodriguezNov 21, 2024
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