average costing


average costing
A method of obtaining unit costs sometimes used when the items produced have a high degree of homogeneity. The unit cost is obtained by dividing the total production cost by the number of items produced.

Accounting dictionary. 2014.

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  • average costing — noun (business) A method of calculating the average cost of producing one unit by taking the total manufacturing costs for a period and dividing by the number of units produced • • • Main Entry: ↑average …   Useful english dictionary

  • Average costing — Under the average cost method, it is assumed that the cost of inventory is based on the average cost of the goods available for sale during the period. Average cost is computed by dividing the total cost of goods available for sale by the total… …   Wikipedia

  • average cost — 1) The average cost per unit of output calculated by dividing the total costs, both fixed costs and variable costs, by the total units of output. 2) (AVCO; weighted average cost) A method of valuing units of raw material or finished goods issued… …   Accounting dictionary

  • average cost — The average cost per unit of output calculated by dividing the total costs, both fixed costs and variable costs, by the total units of output. (AVCO; weighted average cost) A method of valuing units of raw material or finished goods issued from… …   Big dictionary of business and management

  • Average-Cost Method — A costing method by which the value of a pool of assets or expenses is assumed to be equal to the average cost of the assets or expenses in the pool. For example, if one share of Company A s stock is purchased on June 1 for $50.00, again on June… …   Investment dictionary

  • process costing — A costing system sometimes applied to production carried out by a series of chemical or operational stages or processes. Its characteristics are that costs are accumulated for the whole production process and that average unit costs of production …   Accounting dictionary

  • continuous-operation costing — A system of costing applied to industries in which the method of production is in continuous operation; examples include electricity generation and bottling. Because the product is homogeneous, this costing system is essentially a form of average …   Accounting dictionary

  • continuous-operation costing — A system of costing applied to industries in which the method of production is continuous processing; examples include electricity generation and bottling. Because the product is homogeneous, this costing system is essentially a form of average… …   Big dictionary of business and management

  • process costing — A costing system sometimes applied to production carried out by a series of chemical or operational stages or processes. Its characteristics are that costs are accumulated for the whole production process and that average unit costs of production …   Big dictionary of business and management

  • Process costing — is an accounting methodology that traces and accumulates direct costs, and allocates indirect costs of a manufacturing process. Costs are assigned to products, usually in a large batch, which might include an entire month s production. Eventually …   Wikipedia