Average

With the average (AVG) costing method,TireMaster averages the various costs at which an item is received and then uses that average as the item’s next cost.

For example, if you receive a tire in January at a cost of $50 and a tire in February at a cost of $60, the next cost of the item will be $55—the average of the two costs. The next time you sell one of those tires, a $55 cost posts to the general ledger and is used to calculate the value of the tire.