The By Quantity method divides the total cost proportionate to the total quantity of products available on the Value Adjustment lines. Look at the following screenshot to understand how it divides between a quantity of 100 Material and a quantity of 50 final products:
The total cost of 500 will be divided between two products at equally--250 per product. Then, it will be allocated per quantity. The inventory valuation will be look like this:
The cost per one quantity will be computed in the inventory to compute the cost price. It will look like this:
| Product | Rate | Qty | By Method | Cost/Qty |
| Material | 70 | 100 | 333.34 | 73.33 |
| Finished Product | 50 | 50 | 166.66 | 63.33 |
