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COST DEFINITIONS

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    Posted: 11-Feb-2013 at 09:56
I have 10 Widgets which I paid $1.00 for so I have $10.00 worth of stock   $10.00 / 10 items is average cost $1.00

I buy another 10 widgets but this time I pay $1.20 so this is another 12.00 worth of stock

Now my stock is worth $10.00 plus $12.00 = $22.00

To get the new average price divide the value of your stock by the Qty      22/20 and that will give you the new average price. 

So in summary forget about the individual parts

Add the total of your purchase in $ to the value of the existing stock in $ and then divide by what you have in stock Qty = new average price.


TAGS# average cost, average price, calculating average.

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THE BOSS

Joined: 01-Jan-2006
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Post Options Post Options   Thanks (0) Thanks(0)   Quote peach Quote  Post ReplyReply Direct Link To This Post Posted: 19-May-2007 at 06:57
AVERAGE COST = V
CURRENT COST = X
LAST COST = L
 
E.G.  L10 WOULD MEAN LAST COST + 10%
 
A10 WOULD MEAN PRICE LEVEL A LESS 10%
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