The Average Cost Calculator provided by Hesapstan weights each purchase by quantity. It shows total quantity, total cost, per-purchase subtotals and the weighted average unit cost.
What is average cost?
Average cost combines purchase prices with the quantities bought at each price. When quantities differ, the correct result is a weighted average rather than a simple average of prices.
The method can be used for shares, inventory, materials or other units, but the calculator only processes the quantities and prices you enter.
Average-cost formula
For each purchase, quantity is multiplied by unit price to obtain the subtotal. All subtotals form total cost and all quantities form total quantity. Average unit cost equals total cost divided by total quantity.
A larger purchase has more influence on cost. Averaging prices alone ignores that difference.
How to use the calculator
- Enter quantity and unit price for each purchase.
- Add another purchase card when needed or remove unused cards.
- Complete any partially filled active row; fully empty rows are ignored.
- Calculate with at least two completed purchases.
- Review average cost, total quantity, total cost and the labelled purchase breakdown.
Worked example
Suppose 10 units are bought at 100 and another 5 units at 130. The subtotals are 1,000 and 650.
Total cost is 1,650 and total quantity is 15. Average cost is 1,650 ÷ 15 = 110. The simple price average of 115 would be incorrect for these unequal quantities.
Using the result for shares or inventory
For share purchases, the result is the quantity-weighted average entry price of the transactions entered. For inventory or products, it is the average acquisition cost per unit under the same arithmetic method.
- Current market price is not included.
- The tool does not calculate profit or loss.
- Broker fees, taxes, exchange rates, splits and dividends are excluded.
- Accounting or tax cost-basis rules may require a different method.
Common mistakes
- Taking the simple average of purchase prices.
- Assuming commissions or taxes are included.
- Entering a sale as another purchase.
- Leaving a row partially completed.
- Combining purchases in different currencies without conversion.
Limits and financial caution
The calculator does not use live market data, value a portfolio or determine realised profit and loss. It only uses the purchases you enter.
The current tool requires at least two completed purchases and supports up to 30 purchase rows. Editing a row clears the previous result.
Frequently Asked Questions
How is average cost calculated?
Multiply each quantity by its unit price, add the purchase costs, and divide total cost by total quantity.
Why not average the purchase prices directly?
Because purchases with larger quantities should have more influence. A simple price average is misleading when quantities differ.
Are fees and taxes included?
No. The calculator uses only quantity and unit price. Add commissions, taxes and other costs separately when relevant.
Does it use the current stock price?
No. There is no market-data or ticker lookup; only entered prices are used.
Can I include sales?
This version calculates the average of purchases. Remaining cost after sales, FIFO and other inventory methods are outside its scope.
How many purchases can I enter?
Up to 30 purchase rows. At least two rows must contain both a valid quantity and price.
Can this be used as an official accounting cost basis?
It provides a general weighted average. Tax and accounting rules may require another method depending on the jurisdiction and transaction type.