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Weighted average cost is a method of calculating ending inventory cost. It can also be referred to as "WAVCO". It takes cost of goods available for sale and divides it by the number of units available for sale (number of goods from beginning inventory + purchases /production). This gives a weighted average cost per unit.
Economic production quantity. The economic production quantity model (also known as the EPQ model) determines the quantity a company or retailer should order to minimize the total inventory costs by balancing the inventory holding cost and average fixed ordering cost.
Cost of goods acquired includes beginning inventory as previously valued plus purchases. Cost of goods sold is then beginning inventory plus purchases less the calculated cost of goods on hand at the end of the period.
The number of times a business sells and replaces its stock over a given time period is its inventory turnover ratio. The inventory turnover ratio, also sometimes called stock turns or inventory ...
Economic order quantity. Economic order quantity ( EOQ ), also known as financial purchase quantity or economic buying quantity, [citation needed] is the order quantity that minimizes the total holding costs and ordering costs in inventory management. It is one of the oldest classical production scheduling models.
In accounting, the inventory turnover is a measure of the number of times inventory is sold or used in a time period such as a year. It is calculated to see if a business has an excessive inventory in comparison to its sales level. The equation for inventory turnover equals the cost of goods sold divided by the average inventory. Inventory turnover is also known as inventory turns, merchandise ...
Carrying cost. In marketing, carrying cost, carrying cost of inventory or holding cost refers to the total cost of holding inventory. This includes warehousing costs such as rent, utilities and salaries, financial costs such as opportunity cost, and inventory costs related to perishability, shrinkage, and insurance. [1]
An inventory valuation allows a company to provide a monetary value for items that make up their inventory. Inventories are usually the largest current asset of a business, and proper measurement of them is necessary to assure accurate financial statements.