Dictionary of Business Terms: average cost
average cost
total of all costs for all units bought (or produced), divided by the number of units acquired (or produced).
Dictionary of Finance and Investment Terms: average cost
average cost
Investing: average cost of shares of stock or in a fund bought at different prices. See also average down; average up; constant dollar plan.
Manufacturing: total of fixed and variable costs divided by units of production. Companies with relatively low average costs are better able to withstand price-cutting pressures from competition. Term also describes inventory valuation method whereby the cost of goods available for sale is divided by the number of units available for sale.
