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 Date Type of Transaction Units Unit Price Total cost
1 Jan Beginning Inventory 200 `10 `2000
31 Jan Purchase 300 `15 `4500
28 Feb Purchase 400 `20 `8000
31 Mar Purchase 100 `25 `2500
Total 1000 `17000
Ending Inventory on April 1st is 300 units.
Type Units Sold Unit Price Total Cost
Jan Beginning Inventory 200 `10 `2000
Jan Purchase 300 `15 `4500
Feb Purchase 200 `20 `4000
Total 700 `10500
Ending Inventory Units Unit Price Total Cost
Feb Purchases 200 `20 `4000
Mar Purchases 100 `25 `2500
Total 300 `6500 11
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 Date Type of Transaction Units Unit Price Total cost
1 Jan Beginning Inventory 200 `10 `2000
31 Jan Purchase 300 `15 `4500
28 Feb Purchase 400 `20 `8000
31 Mar Purchase 100 `25 `2500
Total 1000 `17000
Ending Inventory on April 1st is 300 units.
Type Units Sold Unit Price Total Cost
Mar Purchase 100 `25 `2500
Feb Purchase 400 `20 `8000
Jan Purchase 200 `15 `3000
Total 700 `13500
Ending Inventory Units Unit Price Total Cost
Beginning Inventory 200 `10 `2000
Jan Purchases 100 `15 `1500
Total 300 `3500 13
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 Date Type of Transaction Units Unit Price Total cost
1 Jan Beginning Inventory 200 `10 `2000
31 Jan Purchase 300 `15 `4500
28 Feb Purchase 400 `20 `8000
31 Mar Purchase 100 `25 `2500
Total 1000 `17000

Ending Inventory on April 1st is 300 units.

10+15+20+25
Simple Average = = `17.5
4
Ending Inventory Value = 300 x 17.5 = `5250
Cost of goods sold = 700 x 17.5 = `12250

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 Date Type of Transaction Units Unit Price Total cost
1 Jan Beginning Inventory 200 `10 `2000
31 Jan Purchase 300 `15 `4500
28 Feb Purchase 400 `20 `8000
31 Mar Purchase 100 `25 `2500
Total 1000 `17000

Ending Inventory on April 1st is 300 units.

10 200 +15 300 +20 400 +25(100)

Weighted Average = = `17
1000
Ending Inventory Value = 300 x 17 = `5100
Cost of goods sold = 700 x 17 = `11900

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 Date Type of Transaction Units Unit Price Total cost
1 Jan Beginning Inventory 200 `10 `2000
31 Jan Purchase 300 `15 `4500
28 Feb Purchase 400 `20 `8000
31 Mar Purchase 100 `25 `2500
Total 1000 `17000

Ending Inventory on April 1st is 300 units.

Date Units Unit Price Total cost Moving Average
1 Jan 200 `10 `2000 `10
31 Jan 300 `15 `4500 `13
28 Feb 400 `20 `8000 `16.11
31 Mar 100 `25 `2500 `17

Ending Inventory Value = 300 x 17 = `5100 2000 + 4500

= 13
Cost of goods sold = 700 x 17 = `11900 200 + 300
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Simple average and Weighted average
cannot be calculated until the period is
over. So they are not suited to Perpetual
system.

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[1] Tersine, R.J., Principles of Inventory and Materials
Management, 4th edition, Prentice-Hall Inc., New Jersey,
1994.

[2] http://en.wikipedia.org/wiki/Inventory_valuation
(Accessed on 11-09-2010).

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