## Valuation of Material Issues
The general rule: materials issued from stores should be valued at the price at which they are carried in stock.
The challenge: materials are bought at different times and different prices (varying discounts, taxes, etc.), so it is hard to assign a single uniform value when issuing to production.
The solution: use a suitable valuation/pricing method to price issues accurately and consistently. The cost accountant chooses the method.
### Factors in choosing a valuation method
| Factor | Why it matters |
|---|---|
| Frequency of purchases & price fluctuations | How often materials are bought and how much prices swing over time. |
| Frequency & quantity of issues | How often and in what quantity materials go to production. |
| Nature of the cost accounting system | Job costing, process costing, etc. |
| Nature of business & production process | Continuous production vs custom jobs, etc. |
| Management policy on closing stock valuation | FIFO, LIFO, weighted average — depending on how closing inventory should be valued. |
> Several pricing methods exist to answer this problem — e.g. Specific Price Method, FIFO, LIFO, weighted average.