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Average Inventory Cost

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Definition: Item price minus discounts, plus freight and taxes. The average is found by adding the beginning cost inventory for each month plus the ending cost inventory for the last month in the period. If calculating for a season, divide by 7. If calcualting for a year, divide by 13.
Examples:
For a 6-month season: Inventory at cost in Jan $52,000, Feb $35,000, March $48,000, April $65,000, May $35,000 and June $60,000 (52,000 + 35,000 + 48,000 + 65,000 + 35,000 + 60,000) ÷ 7 = $42,142.86
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