I n t e r a c t I v e t e X t foundations in Accountancy/ acca financial accounting (ffa/FA) bpp learning Media is an acca approved Content Provider

FIFO (first in, first out)

. Using this technique, we assume that components are used in the order 

 

in which they are received from suppliers. The components issued are deemed to have formed 

 

part of the oldest consignment still unused and are costed accordingly. 

 

AVCO (average cost)

. As purchase prices change with each new consignment, the average cost 

of components held is constantly changed. Each component held at any moment is assumed to 

have been purchased at the average price of all components held at that moment. 

