Weighted Average method calculates the average cost of all units available for sale, treating all purchases and opening inventory with equal weight. This method smooths out price fluctuations and reduces the impact of specific purchase price variations. Formula: Weighted Average Price = Total Cost of Goods Available / Total Units Available. COGS = Weighted Average Price x Units Sold; Closing Inventory = Weighted Average Price x Units Remaining. The method is simple and objective, requiring no assumptions about flow of goods. Weighted Average can be calculated on a periodic or moving basis. Periodic weighted average uses all units available during the period; moving average updates after each purchase. Weighted average provides moderate COGS and moderate closing inventory values during inflation. The method provides a balanced result between FIFO and LIFO, particularly useful when inventory is homogeneous. During price deflation, weighted average results in between values as well. The method is intuitive and less prone to manipulation compared to LIFO. Under both IFRS and Indian accounting standards, weighted average is an accepted and recommended method. Proper documentation of calculations is essential for audit trails. Exam tip: Create a detailed working showing all calculations step-by-step; practice both periodic and moving average weighted calculations; ensure calculations are clear and auditable.