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Average Cost
Sure, the average cost is the total cost divided by the number of items.
Formula:
Average Cost = Total Cost / Number of Items
Explanation:
- Total Cost: The total cost of all the items.
- Number of Items: The number of items being averaged.
Example:
“`If a company has a total cost of $10,000 and has 2,000 items, the average cost is:
Average Cost = $10,000 / 2,000 = $5.00“`
Therefore, the average cost is $5.00 for this company.
Additional Notes:
- The average cost can be calculated for any group of items, such as products, services, or expenses.
- The average cost can be used to compare costs between different groups of items.
- The average cost can be used to budget and control costs.