Used in the periodic inventory method to compute the value of inventory and the cost of goods sold. This average cost is based on the total cost of goods available for sale for the entire year (after all purchases for the year have occurred). The average cost per unit is then applied to the units in inventory and to the units that have been sold.
Featured Review
"I love having this PRO Plus resource available. I am an office manager that deals with all of the financial accounting for my company. I have a degree in accounting but there are many times I have logged on to find information that I needed or confirmation of what I thought was correct. The best money I have ever spent and it has saved me a few times. Thanks for making this available and so accessible when it's needed." - Vadra G.
Join PRO or PRO Plus and Get Lifetime Access to Our Premium Materials
Read all 2,645 reviewsWe now offer 10 Certificates of Achievement for Introductory Accounting and Bookkeeping: