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INVENTORY GUIDE

How Weighted Average Inventory Costing Works

Weighted average costing blends available inventory cost into a current unit cost after eligible receipts.

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01

Simple principle

Total available cost divided by total available quantity produces the moving average.

  • Purchase receipts
  • Opening cost
  • Returns and adjustments
02

Why controls matter

Negative stock and missing opening cost can make profit unreliable.

  • Valuation readiness
  • COGS integrity
  • Reconciliation
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