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The method in which issue prices of material is computed by dividing total purchase cost of material in stock with total quantity in stock…

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The method in which issue prices of material is computed by dividing total purchase cost of material in stock with total quantity in stock ________.
  • ASimple average method
  • Bweighted average method
  • Cperiodical average method
  • Dperiodic simple average method
Correct answer: B
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weighted average method

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. Under this method weighted average price is calculated by dividing the total cost of material purchased during the accounting period, in which the material to be priced is used by the total quantity of material purchased during that period.