Advantages and Disadvantages of Periodic Weighted Average Price Method


This method is like weighted average price method, except that the calculations of issue prices are made periodically (say, a month). The rate so arrived is used for the issues made during that period and also for valuing the inventory at the end of the period.


1. This method is superior to the periodic simple average price method as it takes into
account the quantities also.


2. It overcomes or evens out the effect of fluctuations.

3. In addition to above, the method also possesses all the advantages of the simple weighted average price method.


1.This method is not suitable for job costing because each job is to be priced at each stage of completion.

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