Question: Explain why, when using the average cost formula in a perpetual inventory system, we must calculate a new weighted average unit cost after each purchase,

Explain why, when using the average cost formula in a perpetual inventory system, we must calculate a new weighted average unit cost after each purchase, but not after each sale.

Step by Step Solution

3.17 Rating (164 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock

A new weighted average unit cost must be calculated after each purchase because a new cost a... View full answer

blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Financial Accounting Tools For Business Questions!