ECONOMICS

Detailed explanation-1: -A weighted average is sometimes more accurate than a simple average. In a weighted average, each data point value is multiplied by the assigned weight, which is then summed and divided by the number of data points. For this reason, a weighted average can improve the data’s accuracy.

Detailed explanation-2: -The weighted average cost method calculates the average cost of your inventory, per unit. You can calculate WAC by dividing your cost of goods sold (COGS) by the total number of units in your inventory.

Detailed explanation-3: -Expert-Verified Answer. The system in which fluctuation in prices are averaged out is average cost method. it is a method to assign price to inventory items . the formula of this is-total cost of goods produced or purchases by the total number of the goods produced or purchased.

Detailed explanation-4: -Average cost method is best suitable when the prices are fluctuating considerably because this method tends to smooth out fluctuation in prices.