Method of Simple Average, Business Mathematics and Statistics Video Lecture - Business Mathematics and Statistics - B Com

hi in this video I am going to explain
simple average method and weighted
average method in the pricing of
material issue so in the pricing of
material issue we have different methods
to calculate the issue price in that in
the previous video I have explained you
first in first out and last in first or
in this video I am going to focus simple
average and weighted average method from
this problem just look at this problem
from the following particulars repair
stores ledger by adopting simple average
and weighted average method of pricing
of material issues so debt is given a
received an issue information is given
okay look at the first one on 1st
January 400 units at 10 rupees per unit
so this is a receptor acquisition of raw
material from the supplier so there is a
possibility of different prices for
different Lots okay so you have to enter
the information which is given in the
problem on 5th or 200 units at 12 rupees
per unit on 10 that they have upward 500
units at the rate of 11 per unit so now
we have three different lots of units so
on 12 they shoot 300 units ax so now you
have to find out the issue price they
are going to issue 300 units now for 300
units what is the rate per unit so
according to simple average method we
need to calculate the average price
because we are going to issue 300 from
the total receptor so 400 plus 200 600
600 plus five hundred thousand hundred
from thousand hundred you are going to
issue three hundred for physical
distribution he can follow first in
first out method because first in first
what means first in first you equate the
first alert know from that lot you can
issue three hundred but when you issue
three hundred from the 400 uni you
cannot apply ten rupees why because this
is simple average method so according to
this method you have to take the total
price and you need to find the average
10 plus 12 plus 11 divided by 3 so based
on that you can calculate
issue price for each and every unit sir
115 you're going to issue 200 units no
for that again you have to calculate the
average in the same way you can find the
issue price for each and every issue on
xx 300 units received at the rate of 14
per unit on 22nd 400 units issued on
25th 250 units received on 26th of 200
units received on 29th 300 units issued
on 31st 200 units is sure so with this
information they ask you to prepare
those lecture by adopting simple average
and weighted average for the same
problem so first I am going to explain
simple average then we can go for
weighted averages look at the stores
ledger format stores ledger account
according to sample average method name
code number description for the material
maximum level minimum level reorder
level reorder quantity folio number bin
number location for so these are the
general format so this is the format for
stores ledger account so first column
for date second column for particulars
you have to record whether it is
received or issue that you have to
record according to the reference number
based on the reference number so this is
the column for receptor so this is the
column for issue and the last one for
balance
okay so now I'm going to prepare stores
ledger according to simple average
method 2015 January first four hundred
units received at ten rupees or a unit
does say when you record the first
transaction so for recipe you have to
write the G or n number that is goods
received note number so this is the
reference for receptors or how many
number of units awkward four hundred
units received no just write four
hundred each unit 10 rupees no
multiplied with ten what is amount four
thousand so immediately up to write the
same thing in balance on the same day
four hundred units 10 rupees each
four thousand
grab the second transaction on 5th of
January two hundred units received at
twelve rupees per unit January filter
goes through say note number how many
units two hundred units at the rate of
twelve rupees per unit two hundred and
twelve two thousand four hundred
immediately you have to write the
balance so when you write the balance
you need not write rate for each and
every lot just write the quantity so
already we had 400 now now you have
acquit 200 so 400 plus 200 what is the
total 600 okay Ahmad already we had four
thousand oh now two thousand four
hundred total six thousand four hundred
you need not write the rage for the
first Iran you can write the rate for
the next item when you calculate the
balance you need not write the rate just
write the quantity total quantity in
your hand and what is a total amount for
the 600 quantity on ten five hundred
units received at the rate of 11 per
unit on 10 goats loose a note number how
many UNIX 500 units at the rate of 11
per unit 500 into 11 how much 5500 say
immediately you have to write the
balance already we had 600 know now we
are required 500 so 600 plus 500
thousand 100 quantity units in your hand
amount already we had 6400 value of
goods know now what is our mount 5500 so
6400 plus 5500 what is a total 11900 no
need to write the rate on 12
3 received over on 12 it 300 units
issued so in this case you have to find
the issue price for this 300 units 12 so
now we are going to issue no for issue
you have to write the material
requisition number for receptor goats
receive
note number you have to write for issue
you have to write the material
requisition number how many units you
are going to issue three hundred just
write three hundred okay now you have to
calculate the rate per unit so according
to simple average method you have to
find the total so now from thousand one
hundred you're going to issue three
hundred No
so this thousand one hundred which
consists of 400 plus 200 plus five
hundred altogether thousand one hundred
for pricing of issue you need to find
the average so what is the first law
price ten rupees second one twelve
rupees third one eleven rupees just find
the total divided by three you will get
the average price 10 plus 12 plus eleven
divided by three so what is the rate 11
rupees so this is the issue price for
this 300 units so 300 into 11 how much
3300 issue
so from thousand hundred you have issued
three hundred so what is the balance 800
units right no need to write now you
have to find the amount from 11900 you
have issue 3300 just - three thousand
three hundred from 11900 you will get
the remaining balance amount
8600 that's all okay so this three
hundred you have issued from the past
load physical exhaustion will be based
on the first in first out but for rate
calculation you cannot take the first
load later
so according to this method you have to
find the average so now from 400 your
way shoot three hundred no still we have
handed unit from the first lot when you
go for second issue you can consider the
handle faster so next one on 15 again
you're going to show two hundred units
on 15 the material requisition number so
you should how many number of units two
hundred number of units for that you
have to find the average
so this 200 you are going to take from
the 800 no this 800 with which consists
all 500 plus 200 plus handle from the
hostel or total 800 so now take the
first price 10 plus 12 plus 11 doted by
3 what is the value again
11200 into 11 how much 2200 what is the
balance from the a 10 area ratio 200
balance 600 is a amount from 8600 - 2200
balance 6400 next on 22 january 300
units that received at 14 rupees per
unit snow on 20th boots this is what
received up Yemen
number 4 issue grn number 4 receptor so
how many number of units received 300 no
300 each
14 per unit 300 into 14 what is amount
4,200 just put the total already we had
600 now 600 plus 300 900 rate need not
write 6400 plus 4000 200 total
10600 next transaction on 22nd 400 units
issued material requisition number how
many units 400 units no right under
issue column 400 so now we are going to
issue 400 no for that you need to find
the issue price say we have 900 on this
900 which consists off 300 plus 500 how
much 800 salt of 918 it is there the
remaining hundred from the second lot
okay so now we are going to issue 400
from the 900 this 900 consists off 300
plus 500 total unit is a know hundred
from the second law so while you
calculate the
issue price you have to take that these
three issue price twelve plus 11 plus 14
dotted by three twelve point three three
just take two digits only there is
twelve point three three alone you can
take twelve point three three into four
hundred four thousand nine thirty two
just write the balance around 900 you
have issued for Hornet what is a balance
500 from ten thousand six hundred soar -
four thousand nine thirty to balance
five thousand six hundred sixty eight on
25th 250 units received at 15 per unit
on 25th up boots recede note number
Tommy number Phoenix 250 units at the
rate of 15 per unit so 250 into 15 three
thousand seven fifty just add along with
the balance so already we had five
hundred no I handed plus two fifty seven
fifty five thousand six sixty eight plus
three thousand seven fifty nine thousand
four hundred and eighteen next
transaction on twenty six the two
hundred units at 16 per unit err on 26th
Goods proceed note number home a number
of units two hundred at the rate of 16
per unit two hundred 216 3200 just put a
total already we had 750 now 750 plus
two hundred nine fifty nine thousand
four eighteen plus three thousand two
hundred total twelve thousand six
eighteen next on 29th 300 unit is sure
on 29th issue material requisition
number how many units 300 units no so on
the ratio you have to write three
hundred okay for price you have to find
the average so now we are going to H so
three hundred
from 950 this 950 which consists of 200
plus 250 450 plus 300 750
okay so 950 - 750 still you need to have
200 know that 200 you can take from the
previous one so now when you calculate
issue price you can take the 4 receive -
price that is 11 plus 14 plus 15 plus 16
divided by 4 11 plus 14 plus 15 plus 16
divided by 4 14 so what is the value 300
into 14 hummer 4200 now we have to write
the balance from 950 Yahoo shoe 300
balance 650 from 12,000 618 - 4200 8,000
for 18 last transaction on 31st January
200 units issues on 31st January
material requisition number how many
units 200 No
so this 200 you can take from the
balance in Flickr that is 650 so this
650 consists of 200 + 350 450 the
remaining 200 from the this lot for
calculation of issue price you have to
take the 3 receive the price that
because the 650 consists of these three
law 14 plus 10 plus 16 divided by 3 what
is the value 15 so 200 into 15 3
thousand from 650 Highlands 450 from
8,000 for a tenure issue 3000 balance
5000 for 18 all the transactions you
have recorded in the stores ledger that
is 6 received and 5 issues now the
closing stock is how many units are
there in the ballet
450 units are there no so 450 units
valued at the pace 5000 418 now let us
say the weighted average method okay so
I'm going to work out the same problem
according to weighted average method so
according to Baker average method here
new price is calculated and shown in the
balance column whenever there is a fresh
recipt of material so let me explain
with the problem you see the first one
400 units are received at the rate of 10
per unit 2015 January 1st goods they say
note number how many units 400 units
received no 400 at the rate of 10 per
unit 400 into 10 4000 enter 4000 Center
this information in the balance column
immediately so whenever you receive any
codes immediately you have to show in
the balance column for the first a lot
you can record the same value so balance
400 unit and the rate of 10 amount 4000
second transaction on v of 200 units at
the rate of 12 per unit received 150
goods receipt note number how many units
200 units the rate of 12 200 into 12
2400 and when you record the balance
column you need to find the new price
this is very very important according to
weighted average method whenever you
receive any recipe you need to find the
new price and that will be shown in the
balance column okay so when you issue
any material from the balance you can
apply the same new press which is
calculated in the previous one so now
200 no ad along with the old one 400
plus 200 600 okay amount per thousand is
they know now two thousand four hundred
four thousand pestle
four hundred six thousand four hundred
so the new rate will be calculated based
on the two value total amount divided by
total number of units that is six
thousand four hundred divided by 600 so
what is a value ten point six six six
seven so according to weighted average
method you have to take the four digits
of that is a ten point six six six seven
so let me explain this six thousand four
hundred divided by six hundred what is
the value ten point six six six six six
six seven no so you have to take the
four digits faster four digit six six
six six six no so you can convert into
seven if it is more high and more than
five means you can convert this number
so ten point six six six seven on 10 500
units recipie know the rate of 11 on
tenth goods received note number 500
units at the rate of 11 what is the
value 5500 immediately we have to find
that new price so how many units are
there 600 no now you have acquit 500
total thousand one hundred old amount
six thousand four hundred plus five
thousand five hundred is the total
11900 immediately you have to find the
new price that will be shown in the
balance column so how will calculate
this value 11 thousand nine hundred
divided by thousand hundred ten point
eight one eight two you can convert this
number okay so ten point eight one eight
two on twelve 300 units issue at the
time of issuing the union's you can take
the new price which is calculated and
shown in the balance column on twelve
material requisition number how many
units 300 units issue no issues under
ratio column 300 units irate rate per
issue is ten point eight one eight two
for this purpose only we have adopted
weighted average
that according to this method again you
need not calculate any rate simply you
can take the a new price which is
calculated in the previous ten point
eight one eight to ten point eight one
eight to three hundred into ten point
eight one eight two
what is the value three thousand to
forty five one thousand hundred you have
issued three hundred know what is the
balance
eight hundred from 11900 subtract three
thousand to forty five balance eight
thousand 655 now again you have to find
the new price how will calculate the new
price 8006 55 divided by 800
what is the value on 15 again 200 units
issue under paint a material requisition
number 200 units issues from H and F
here going to show two hundred No so how
we will calculate the rate you can take
the same thing ten point eight one eight
eight
according to weighted average method
this is the procedure 200 into ten point
eight one eight eight it is a value mm
1/60 for balance eight hundred minus two
hundred balance six hundred from eight
thousand 655 - mm 1/60 for balance six
thousand four ninety one again you have
to find the new price that is six
thousand four ninety one divided by six
hundred ten point eight one eight three
one twenty eight three hundred units
received 120th goods received note
number three hundred units at the rate
of protein
three hundred into fourteen four
thousand two hundred ad along with the
balance and you have to find out the new
price six hundred plus three hundred
nine hundred six thousand four ninety
one plus four thousand to one because is
a recipe of the ad
with this value so when issue you have
to subtract when you receive you have to
add along with this value six thousand
four ninety one plus four thousand two
hundred ten thousand six ninety one how
will calculate the rage
ten thousand six ninety one divided by
900 you'll get the new price eleven
point eight seven eight nine on 22nd
four hundred units issue on 22nd
material requisition number okay so how
many number finance ratio
four hundred units know so right here
four hundred so from nine hundred
orientation four hundred you can apply
the same rate new price eleven point
eight seven
h9 not four thousand seven fifty so we
can round the figure balance from nine
from nine hundred you shoot four hundred
not balanced five hundred from ten
thousand 691 subtract four thousand
seven fifty to balance five thousand
nine thirty nine again you have to find
the new price five thousand nine thirty
nine divided by five hundred what is the
value eleven point eight seven eight
eleven point eight seven eight 125th 250
units received at the rate of fifteen
per unit twenty fifty goods received
note number how many units to fifty
units at the rate of fifteen per unit so
250 into fifty three thousand 750 ad
along with the balance five hundred plus
two fifty seven fifty five thousand nine
thirty nine plus three thousand seven
fifty nine thousand six eighty nine
again you have to find the new price
that is nine thousand six eighty nine
divided by seven fifty twelve point nine
one eight seven on 26th two hundred
units at the rate of 16 per unit
Roots received not number 200 units at
the rate of 16 per unit so 200 216 3200
ad along with the balance 750 plus 200
950 amount column 9000 689 plus three
thousand two hundred total 2008 89 again
you have to find a new price oil got a
new price total amount divided by total
number of units up thirteen point five
six seven four on 29th of 300 units
issue twenty-nine material requisition
number three hundred units no right
under issue three Hunter rich you can
take the new price thirteen point five
six seven four so what is the value
three hundred into thirteen point five
six seven four four thousand seventy
balance nine fifty minus 300 balance 650
twelve thousand eight eighty nine minus
four thousand seventy eight thousand
eight nineteen again you have to find
the new price eight thousand eight 19
divided by six fifty thirteen point five
six seven four last one on 31st step
january 200 units issued 31st material
requisition number four issue how many
units 200 units know what is the rate
thirteen point five six seven four two
hundred into thirteen point five six
seven four is equal to two thousand
seven one three balance 650 - two
hundred fifty eight thousand eight
nineteen - two thousand seven thirteen
almost six thousand one not six again
you have to find a new place six
thousand one our sixty ordered by 450
thirteen point five six eight nine
that's all just like the closing stop
value closing stock commie number of
units 450 units no 450 units valued at
six thousand one not six rupees so far
we have discussed simple average and
weighted average method I hope you all
understood these concepts if you like
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