Weighted Average Method for Calculating Cost of Merchandise Sold | CFA® Level 1 Exam Prep

Weighted Average Method

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Question

The weighted average method is based on the assumption that the cost of merchandise sold should be calculated using the :

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A. B. C. D.

D

Under the weighted average method, inventory is priced at the average cost of the goods available for sale (Beginning inventory plus purchases during the period). The cost for the ending inventory under this method is influenced by all the prices paid during the period.