This is done by finding out the average of the beginning inventory and end for the accounting period. Average inventory refers to the average quantity of stock available in a specified period of time. This method of planning inventory levels is useful for retailers with consistent-selling items that are not subject to large fluctuations.
The average inventory of the year The beginning inventory The ending inventory 2 Or Average inventory of the year 40000 60000 2 100000 2 50000.
Beginning of month stock Average weekly sales x Number of weeks to be stocked. The average inventory of the year The beginning inventory The ending inventory 2 Or Average inventory of the year 40000 60000 2 100000 2 50000. Three Methods of Valuing Inventory. It is calculated as average inventory divided by average sales.