Question

11. Explain the limitation of average profit method ?​

Answer 1

Explanation:

Where the quantity of each purchase is stable but the prices fluctuate, average cost method suits the condition. Disadvantages: (a) Profit or loss in material arises as total cost incurred usually does not become equal to the total charges.

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Answer 2

Explanation:

trend of profitability is not considered since each year profit are given equal weighted distinction is not made between a business that has rising profits and that has falling profits.