Average Cost (also known as Weighted-Average Cost) is a method of determining the cost per unit by dividing total costs by the total output. This method includes recalculating the unit value for raw materials or finished goods after each new consignment.
The expenditure on goods and services required to carry out the operations of an organization. Different methods of defining cost are used in accounting to reflect various aspects of financial reporting and decision making.
Dollar Cost Averaging (DCA) is an investment strategy where an investor consistently buys a fixed dollar amount of an asset, such as mutual funds or securities, at regular intervals. This results in purchasing more units when prices are low, effectively lowering the average cost per share over time.
Finished goods inventory represents the value of products that have completed the manufacturing process and are ready for sale to customers. This inventory is crucial for accurate financial reporting and operational planning.
A method of valuing units of stock or other assets based on the original cost incurred by the organization, charging the original cost against profits through various means such as FIFO or average cost, and reporting depreciation based on the original cost.
Inventory Valuation involves determining the monetary worth of raw materials, work-in-progress, and finished goods, as prescribed by specific accounting standards. It plays a critical role in both financial and management accounting.
