Weighted Average Inventory Cost Calculator
Combine two batches into a weighted-average unit cost, using quantities to reflect how much inventory each batch contributes.
How to use this calculator
- Enter batch a quantity, batch a unit cost, batch b quantity and the remaining stated inputs; keep their units consistent.
- Review the result and intermediate values; change one input at a time when comparing scenarios.
- Keep the stated formula and assumptions with any result you share.
Formula and method
Weighted-average cost per unit = (quantity A × cost A + quantity B × cost B) ÷ (quantity A + quantity B).
- The weighted-average unit cost is €8.216 per unit; combined inventory cost is €4,102.
- Inventory accounting methods and tax requirements vary. This is an arithmetic estimate and does not decide which method your books must use.
Worked examples
Worked example
180 units cost €7.80 each and 320 units cost €8.45 each.
The weighted-average unit cost is €8.216 per unit; combined inventory cost is €4,102.
The weighted-average unit cost is €8.216 per unit; combined inventory cost is €4,102.
Understanding the result
The weighted-average unit cost is €8.216 per unit; combined inventory cost is €4,102.
Inventory accounting methods and tax requirements vary. This is an arithmetic estimate and does not decide which method your books must use.
Important notes
Inventory accounting methods and tax requirements vary. This is an arithmetic estimate and does not decide which method your books must use.
Use measured inputs and verify that the model matches the situation before making an operational, financial or technical decision.
Frequently asked questions
Why not average the two unit prices directly?
The simple average ignores differences in batch quantity.
Can I use more than two batches?
Repeat by aggregating total quantity and total cost across all batches.
What should I check before relying on this result?
Verify units, input definitions and assumptions against your real data or the relevant product, service or professional guidance.
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Related explanations
Learn the method behind the number or compare the terminology before using the calculator.
- How to Calculate Break-Even Point — Learn the break-even formula for units and revenue and understand fixed costs, price, and variable costs.
- How to Calculate ROI — Learn the return on investment formula and how to interpret profit, cost, and percentage return.
- Markup — Learn what markup means, how markup is calculated from cost and selling price, and how it differs from margin.
This page provides a calculation tool plus explanatory information so you can understand what the result means and when the underlying method may not fit your situation.