Inventory Valuation Methods

The video tutorial covers four major inventory valuation methods: specific identification, weighted average, FIFO (first-in, first-out), and LIFO (last-in, first-out). It provides detailed explanations and examples for the weighted average, FIFO, and LIFO methods, illustrating how to calculate inventory values using each method. The tutorial emphasizes the importance of understanding these methods for accurate inventory management and financial reporting.

Which of the following is NOT a method of inventory valuation?

• FIFO

• Weighted average

• Specific identification

• Depreciation

Which method is used when the cost of each item is unique and identifiable?

• Specific identification

• Weighted average

• FIFO

• LIFO

Which method is used when the cost of each item is unique and identifiable?

• FIFO

• LIFO

• Weighted average

• Specific identification

What is the first step in the weighted average method?

• Determining the number of units sold

• Multiplying the number of items by the average cost

• Calculating the average cost per unit

• Finding the total cost of all units

How do you calculate the average cost per unit in the weighted average method?

• Subtract total units from total cost

• Multiply total cost by total units

• Divide total cost by total units

• Divide total units by total cost

In the weighted average method, if the total cost is $455 and the total units are 50, what is the average cost per unit?

• $8.10

• $9.10

• $10.10

• $11.10

What is the final step in calculating inventory value using the weighted average method?

• Dividing the total cost by the number of units sold

• Adding the cost of new purchases

• Multiplying the average cost by the number of units in inventory

• Subtracting the cost of sold units

In the weighted average method, what is the inventory value if the average cost per unit is $2.05 and there are 720 units?

• $1,600

• $1,500

• $1,476

• $1,700

In the weighted average method, what is the inventory value if the average cost per unit is $9.10 and there are 20 units?

• $210

• $200

• $191

• $182

Which method averages out the cost of all units available for sale?

• FIFO

• Specific identification

• LIFO

• Weighted average