Definitions for **"Average Cost Method"**

The method of inventory costing that is based on the assumption that costs should be charged against revenue in accordance with the weighted average unit costs of the items sold.

This is the average price of units purchased by the investor calculated by adding up all the costs involved in purchasing all the units of investment and then dividing the sum by the total number of units. .

A method of finding out the cost per unit by adding up all the costs involved in purchasing all the units of investment and then dividing the sum by the total number of units.