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Q- How system calculate the average cost?

Initial Onhand = 34 Initial Unit Cost = 11.75

Transaction Onhand = 10 Transaction Unit Cost = 10

Answer Posted / gaurav0421

Ans. New Unit cost calculated by the system (Average) =

(Initial Onhand * Initial Unit Cost) + (Transaction Onhand * Transaction Unit Cost) / (Initial Onhand + Transaction Onhand)

= (34 * 11.75) + (10 * 10) / (34 + 10)

= 11.35228

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