Question: A company has decided to switch from using the FIFO method of inventory valuation to using the average cost method (AVCO). In the first accounting

A company has decided to switch from using the FIFO method of inventory valuation to using the average cost method (AVCO).

In the first accounting period where the change is made, opening inventory valued by the FIFO method was K53, 200. Closing inventory valued by the AVCO method was K59, 800.

Total purchases and during the period were K136, 500. Using the AVCO method, opening inventory would have been valued at K56, 200.

What is the cost of materials that should be included in the income statement for the period.

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