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how to calculate the average level of inventory. Every business has to maintain a certain level of raw materials or finished goods in its store. 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.
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The formulas used to calculate the minimum level of stock are given below. Weighted Average Cost Method. Once you know the COGS and the average inventory you can calculate the inventory turnover ratio.
The formulas used to calculate the minimum level of stock are given below.
Average inventory refers to the average quantity of stock available in a specified period of time. Add the cost of beginning inventory plus the cost of purchases during the time frame the cost of goods available for sale. How to Calculate Average Inventory Types of Inventory. This is done by finding out the average of the beginning inventory and end for the accounting period.
