Weighted Average Method – NBC Institute

MI – Nov 2023 – L1 – SB – Q1 – Costing Methods

Create a stores ledger using the weighted average method based on given inventory transactions.

Question

The stores data of ABC Limited for the month of July is as follows:

Required:
Prepare the store ledger account in tabular form using the weighted Average Price Method, showing daily balances as a memorandum on the table. Show workings

Answer

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Tags: Cost Accounting, Inventory Management, Stores Ledger, Weighted Average Method
Level: Level 1

Topic: Costing Methods
Series: NOV 2023

IMAC – AUG 2022 – L1 – Q4 – Inventory Management

Calculation of cost of goods issued and closing inventory using the weighted average method, and identification of causes for material and labour cost variances.

Question

Question: a) The following extracts are from the books of Bediako Enterprise in the month of February:

Date	Description	Units	Per unit cost (GH¢)
01	Receipts	400	42
04	Receipts	700	45
07	Issue	450
10	Receipts	600	48
14	Issue	700
20	Receipts	1,200	50

Required: Using the Weighted Average Method;

i) Calculate the cost of goods issued to Cost of Sales. (3 marks)

ii) Compute the value of closing inventory. (12 marks)

b) Identify TWO (2) possible causes for each of the following variances:

i) Material cost variance.

ii) Labour cost variance. (5 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Closing Inventory, Cost of Goods Issued, Labour Cost Variance, Material Cost Variance, Weighted Average Method
Level: Level 1

Topic: Inventory Management
Series: AUG 2022

IMAC – MAY 2020 – L1 – Q4 – Accounting for Inventory and Labour | Standard Costing and Variance Analysis

Compare FIFO and weighted average inventory valuation, compute profit, and explain standard costing concepts.

Question

a) Grains Dealers Ltd is in the business of buying farm produce in bulk from out-growers for onward sale to manufacturers. In view of the huge volumes of receipt and sale transactions, the company is unable to use the specific pricing method for valuing inventories. The company needs advice on the impact on profit of using the FIFO or Weighted Average methods of inventory valuation. The following data has been extracted for the month of October 2019 for use:

Inventory balance as at 01/10/19 was 800 units at GH¢4 per unit.

Date	Purchases	Sales
	Quantity	Price (GH¢)
05/10/2019	1,200	5.00
10/10/2019
12/10/2019	1,500	6.00
15/10/2019	1,800	7.25
18/10/2019
25/10/2019	2,400	8.00
28/10/2019

Additional information:
A physical inventory count on 31 October 2019 revealed a shortage of 200 units.

Required:
i) Prepare the inventory ledger showing the value of costs of inventory sold, and the closing inventory on the basis of the perpetual inventory valuation system under:

FIFO Method (6 marks)
Weighted Average Method (6 marks)

ii) Compute the profit for the month for each method in columnar form. (3 marks)

b) Explain the following as used in standard costing and variance analysis:
i) Ideal standard;
ii) Attainable standard; (5 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: FIFO Method, Inventory Valuation, Standard Costing, Weighted Average Method
Level: Level 1

Topic: Accounting for Inventory and Labour, Standard Costing and Variance Analysis
Series: MAY 2020

MI – Nov 2023 – L1 – SB – Q1 – Costing Methods

Create a stores ledger using the weighted average method based on given inventory transactions.

Question

The stores data of ABC Limited for the month of July is as follows:

Required:
Prepare the store ledger account in tabular form using the weighted Average Price Method, showing daily balances as a memorandum on the table. Show workings

Answer

Find Related Questions by Tags, levels, etc.

Tags: Cost Accounting, Inventory Management, Stores Ledger, Weighted Average Method
Level: Level 1

Topic: Costing Methods
Series: NOV 2023

IMAC – AUG 2022 – L1 – Q4 – Inventory Management

Calculation of cost of goods issued and closing inventory using the weighted average method, and identification of causes for material and labour cost variances.

Question

Question: a) The following extracts are from the books of Bediako Enterprise in the month of February:

Date	Description	Units	Per unit cost (GH¢)
01	Receipts	400	42
04	Receipts	700	45
07	Issue	450
10	Receipts	600	48
14	Issue	700
20	Receipts	1,200	50

Required: Using the Weighted Average Method;

i) Calculate the cost of goods issued to Cost of Sales. (3 marks)

ii) Compute the value of closing inventory. (12 marks)

b) Identify TWO (2) possible causes for each of the following variances:

i) Material cost variance.

ii) Labour cost variance. (5 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Closing Inventory, Cost of Goods Issued, Labour Cost Variance, Material Cost Variance, Weighted Average Method
Level: Level 1

Topic: Inventory Management
Series: AUG 2022

IMAC – MAY 2020 – L1 – Q4 – Accounting for Inventory and Labour | Standard Costing and Variance Analysis

Compare FIFO and weighted average inventory valuation, compute profit, and explain standard costing concepts.

Question

Inventory balance as at 01/10/19 was 800 units at GH¢4 per unit.

Date	Purchases	Sales
	Quantity	Price (GH¢)
05/10/2019	1,200	5.00
10/10/2019
12/10/2019	1,500	6.00
15/10/2019	1,800	7.25
18/10/2019
25/10/2019	2,400	8.00
28/10/2019

Additional information:
A physical inventory count on 31 October 2019 revealed a shortage of 200 units.

Required:
i) Prepare the inventory ledger showing the value of costs of inventory sold, and the closing inventory on the basis of the perpetual inventory valuation system under:

FIFO Method (6 marks)
Weighted Average Method (6 marks)

ii) Compute the profit for the month for each method in columnar form. (3 marks)

b) Explain the following as used in standard costing and variance analysis:
i) Ideal standard;
ii) Attainable standard; (5 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: FIFO Method, Inventory Valuation, Standard Costing, Weighted Average Method
Level: Level 1

Topic: Accounting for Inventory and Labour, Standard Costing and Variance Analysis
Series: MAY 2020

Question Tag: Weighted Average Method

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MI – Nov 2023 – L1 – SB – Q1 – Costing Methods

Create a stores ledger using the weighted average method based on given inventory transactions.

IMAC – AUG 2022 – L1 – Q4 – Inventory Management

Calculation of cost of goods issued and closing inventory using the weighted average method, and identification of causes for material and labour cost variances.

IMAC – MAY 2020 – L1 – Q4 – Accounting for Inventory and Labour | Standard Costing and Variance Analysis

Compare FIFO and weighted average inventory valuation, compute profit, and explain standard costing concepts.

MI – Nov 2023 – L1 – SB – Q1 – Costing Methods

Create a stores ledger using the weighted average method based on given inventory transactions.

IMAC – AUG 2022 – L1 – Q4 – Inventory Management

Calculation of cost of goods issued and closing inventory using the weighted average method, and identification of causes for material and labour cost variances.

IMAC – MAY 2020 – L1 – Q4 – Accounting for Inventory and Labour | Standard Costing and Variance Analysis

Compare FIFO and weighted average inventory valuation, compute profit, and explain standard costing concepts.

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MI – Nov 2023 – L1 – SB – Q1 – Costing Methods

Create a stores ledger using the weighted average method based on given inventory transactions.

You're reporting an error for "MI – Nov 2023 – L1 – SB – Q1 – Costing Methods"

IMAC – AUG 2022 – L1 – Q4 – Inventory Management

Calculation of cost of goods issued and closing inventory using the weighted average method, and identification of causes for material and labour cost variances.

You're reporting an error for "IMAC – AUG 2022 – L1 – Q4 – Inventory Management"

IMAC – MAY 2020 – L1 – Q4 – Accounting for Inventory and Labour | Standard Costing and Variance Analysis

Compare FIFO and weighted average inventory valuation, compute profit, and explain standard costing concepts.

You're reporting an error for "IMAC – MAY 2020 – L1 – Q4 – Accounting for Inventory and Labour | Standard Costing and Variance Analysis"

MI – Nov 2023 – L1 – SB – Q1 – Costing Methods

Create a stores ledger using the weighted average method based on given inventory transactions.

You're reporting an error for "MI – Nov 2023 – L1 – SB – Q1 – Costing Methods"

IMAC – AUG 2022 – L1 – Q4 – Inventory Management

Calculation of cost of goods issued and closing inventory using the weighted average method, and identification of causes for material and labour cost variances.

You're reporting an error for "IMAC – AUG 2022 – L1 – Q4 – Inventory Management"

IMAC – MAY 2020 – L1 – Q4 – Accounting for Inventory and Labour | Standard Costing and Variance Analysis

Compare FIFO and weighted average inventory valuation, compute profit, and explain standard costing concepts.

You're reporting an error for "IMAC – MAY 2020 – L1 – Q4 – Accounting for Inventory and Labour | Standard Costing and Variance Analysis"

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