answersLogoWhite

0

The advantages of using weighted average cost is that it is consistent, the formula is very simple to use and their is less paperwork. This method, however, makes it difficult to follow the ups and downs of the market if prices change frequently.

User Avatar

Wiki User

11y ago

What else can I help you with?

Related Questions

What are the advantages and disadvantages of cost classification?

the disadvantages of cost classification


What are the advantages of classification and disadvantages?

the disadvantages of cost classification


What are the disadvantages and advantages of capitlism?

cost of capital advantages


What are the limitations of the weighted average cost of capital?

One limitation of the weighted average cost of capital is that a firm may possibly end up having a negative Net Present value. This occurs if the weighted average cost of capital gives a discount rate that is too low.


How can a company determine its weighted average cost of capital (WACC)?

A company can determine its weighted average cost of capital (WACC) by calculating the weighted average of the cost of equity and the cost of debt, taking into account the proportion of each in the company's capital structure. This calculation helps the company understand the overall cost of financing its operations and investments.


Advantages and disadvantages of cost management system?

advantages of cost management in relation to finacial efficiency


Who sets weighted average cost of capital?

It must be the managers


Advantages and disadvantages of cost accounting?

cost accounting advantage & disadvantage


What are the advantages and disadvantages of voice over IP?

It has all the advantages from cost efficient to speed efficiency. Disadvantages? Power dependent.


A firm's cost of finaning in an overall sense is equal to its?

Weighted average cost of capital.


What are Advantages and disadvantages of PMS?

advantages: enhances the accountability in HR operation improves visibility in the performance disadvantages: not cost effective innacurate


What are the advantages of the weighted average method?

The weighted average method is advantageous because it smoothens out fluctuations in inventory costs by incorporating both old and new cost data. It is simple to calculate and less subject to distortions from extreme price changes. This method is also compliant with generally accepted accounting principles (GAAP).