PRICING OF ISSUE OF MATERIAL

   Pricing of issue of materials 

    By pricing the materials issue , we mean fixing the price at which materials are issued from the stores to the production centres.

  The important methods are:

1.FIFO Method:( First in First out)

   The materials are issued in the order in which they are received in the stores.This method is suitable when prices show a falling trend.

2. LIFO Method:(Last in First Out)

     Under this method the materials received last are issued first.

3. Simple Average Method:

  Under this method, Issue price is calculated by dividing the total of the prices of different lots of materials in the stock, by the number of prices involved in the calculation. 

4. Weighted Average method:

      Weighted Average price is a price which is calculated by dividing the total cost of materials in stock by the total quantity of materials in that stock.