Question

Which is of the following is / are false?

• A. In the FIFO method the issue is in the order of receipt.
• B. In the replacement method the current realizable value is taken for pricing the issues.
• C. In the weighted average method issue price is the weighted average of quantity and price and the weight being the percentage of value of each lot in the total stock.
• D. Under inflationary conditions LIFO method will show low value of inventory.
• E. Both (B) and (D) above

Answer 1

The correct option is C In the weighted average method issue price is the weighted average of quantity and price and the weight being the percentage of value of each lot in the total stock.

In the Weighted average cost method the pricing of the materials is done on weighted average basis and the weights will be based on the quantity.