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Q- How system calculate the average cost?
Initial Onhand = 34 Initial Unit Cost = 11.75
Transaction Onhand = 10 Transaction Unit Cost = 10
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Ans. New Unit cost calculated by the system (Average) =
(Initial Onhand * Initial Unit Cost) + (Transaction Onhand * Transaction Unit Cost) / (Initial Onhand + Transaction Onhand)
= (34 * 11.75) + (10 * 10) / (34 + 10)
= 11.35228
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