Average Cost
When new stock is combined with old stock, the new price often overstates the value of stock holding. The better method is to combine the total value of investment in stock, old and new, and divide by the total number of units to calculate the average cost. This is a very accurate method of establishing stock holding.
Read more about this topic: Cost Price, Forms
Famous quotes containing the words average and/or cost:
“He seems like an average type of man. He’s not, like smart. I’m not trying to rag on him or anything. But he has the same mentality I have—and I’m in the eighth grade.”
—Vanessa Martinez (b. c. 1978)
“It is not enough for theory to describe and analyse, it must itself be an event in the universe it describes. In order to do this theory must partake of and become the acceleration of this logic. It must tear itself from all referents and take pride only in the future. Theory must operate on time at the cost of a deliberate distortion of present reality.”
—Jean Baudrillard (b. 1929)