Average Cost Method . The average cost method is another inventory costing method. With this method, companies add up the total cost of goods purchased or produced during a specified time.

Average cost method: Over time, your total investment is ($2,000 + $750) = $2,750. Since your total shares are 150 and the average cost per share is $2,750 ÷ 150 = $18.33, the cost basis for 120 ...