Explained
With 10 units at 25 and another 10 received at 35, the average becomes 30. It is simple and suits most retail and distribution businesses.
Example
10 × 25 + 10 × 35 = 600 ÷ 20 = 30 a unit.
Moving average cost values stock by recalculating the average unit cost at every receipt, and issuing each unit at the average of its moment.
With 10 units at 25 and another 10 received at 35, the average becomes 30. It is simple and suits most retail and distribution businesses.
10 × 25 + 10 × 35 = 600 ÷ 20 = 30 a unit.