If someone who had never watched Game of Thrones â or read the original written series A Song of Ice and Fire â asked who the main character was, what would you say? Though many point to Jon Snow, Tyrion Lannister, and Daenerys Targaryen as the main protagonists, narrowing it down to just one is tough. Thanks to the beauty of statistical analysis and network science, we finally have an answer: Tyrion Lannister.
As you can see, the average cost moved from $87.50 to $88.125âthis is why the perpetual average method is sometimes referred to as the moving average method. The Inventory balance is $352.50 (4 books with an average cost of $88.125 each).
A weighted inventory average determines the average cost of all inventory items based on the inventory items' individual cost basis and the quantity of each item held in inventory. Step 1. Determine the cost of every inventory item and the number of units associated with the inventory items. For example, assume a company has 10 units at a $10 cost basis, 15 units at a $15 cost basis and 20 units at a $20 cost basis. Step 2. Multiply the quantity by the price point for that quantity. Continuing the same example, 10 x $10 = $100, 15 x $15 = $225, and 20 x $20 = $400. Related Reading: How to Compute Inventory Turnover & an Average Days' Supply of Inventory.