average cost

What is average cost?

average cost definition and meaning on Finance terms:
The continued (or weighted) average method, by which the cost of every purchase is added to the existing book value to produce a new weighted average cost. <

 

reference: https://www.ecb.europa.eu/home/glossary/html/index.en.html

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Average cost

Average cost represents the average cost per unit of output. It is calculated by dividing total costs, both fixed costs and variable costs, by the total units of output. For example, if total costs are

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