...
| Entry | Entry UP | Exit | Exit UP | AVCO | Stock valuation |
|---|---|---|---|---|---|---|
Initial stock | 20 | 2 |
|
| 2 | 40 |
X Date |
|
| 12 | 2 | 2 | 16 |
Y Date | 20 | 3.4 |
|
| 3* | 84 |
Z Date |
|
| 10 | 3 | 3 | 54 |
* : Calculation details: ((8 remaining product in stock * 2) + (20 products to add * 3.4)) / 28 total products = 3.
At the Y date, we calculated the AVCO according to the number of products added in the stock their unit prices. Therefore, all products in stock now have a reassigned unit value, which depends on the new AVCO.