Understanding Average Cost Calculation in Biztory

To calculate the average cost per unit after a new purchase, follow these steps:

1. Total Cost Before Purchase: Calculate the total cost of units you already had before the new purchase. This is done by multiplying the number of units by their individual cost.

2. Total Cost for Current Purchase: Calculate the total cost of the new units purchased. Multiply the number of units purchased by their individual cost.

3. Current Stock Level: Determine how many units you currently have in stock, including both the initial stock and the new purchase.

4. Average Cost Calculation: Use the formula Average Cost =

Example:

Let's say:

• You originally had 50 units costing RM10 each.
• You purchased an additional 30 units at RM15 each.

Calculations:

• Total cost before purchase: 50×10=500
• Total cost for current purchase: 30×15=450
• Current stock level: $50+30=80$

Average cost per unit:  

Therefore, the average cost per unit after the current purchase is RM11.875.