Explain with example the mean of weighted average under material issue?

Weighted average under material issue refers to calculating the average cost of materials by taking into account the quantity of each material used in production. This method is used when different materials have different costs and are used in varying quantities.

For example, let's say a company produces a product using two types of materials: Material A and Material B. Material A costs $5 per unit and Material B costs $10 per unit. In a given period, the company uses 100 units of Material A and 50 units of Material B.

To calculate the weighted average cost of materials, we would first calculate the total cost of each material used:
Total cost of Material A = $5/unit x 100 units = $500
Total cost of Material B = $10/unit x 50 units = $500

Next, we would calculate the total quantity of materials used:
Total quantity of materials = 100 units of Material A + 50 units of Material B = 150 units

Finally, we would calculate the weighted average cost of materials by dividing the total cost of materials by the total quantity of materials used:
Weighted average cost of materials = ($500 + $500) / 150 units = $1000 / 150 units = $6.67 per unit

Therefore, the weighted average cost of materials used in production is $6.67 per unit. This method takes into account the different costs and quantities of materials used, providing a more accurate representation of the average cost of materials.

Weighted Average is a method of calculating the average cost of an item when there are multiple purchases of the same item at different prices. The cost of each purchase is multiplied by the number of units purchased, and the total cost is divided by the total number of units purchased.

For example, suppose a company purchases 100 units of a product at $10 per unit, and 50 units at $12 per unit. The weighted average cost per unit is calculated as follows:

```
Weighted Average Cost = (100 units x $10 per unit + 50 units x $12 per unit) / (100 units + 50 units)
Weighted Average Cost = (1000 + 600) / 150
Weighted Average Cost = $11 per unit
```

Example:

Suppose a company has the following material issues:

| Date | Quantity | Unit Cost | Amount |
|---|---|---|---|
| Jan 1 | 100 | $10 | $1,000 |
| Jan 15 | 50 | $12 | $600 |
| Feb 1 | 75 | $14 | $1,050 |

The weighted average cost per unit is calculated as follows:

```
Weighted Average Cost = (100 units x $10 per unit + 50 units x $12 per unit + 75 units x $14 per unit) / (100 units + 50 units + 75 units)
Weighted Average Cost = (1000 + 600 + 1050) / 225
Weighted Average Cost = $11.60 per unit
```

Therefore, the weighted average cost of the materials issued is $11.60 per unit.