If a new company calculates the average cost of its inventory by adding together the total cost of all purchases and then dividing it by the number of units purchased during the period, it is using the weighted cost method.

Average

Explanation:

 The weighted average cost method is one of the effective method that is used for calculating the inventory cost and it is also called as WAVCOs.  

It is basically determine by dividing the actual product cost by the actual availability of the sales unit. This method id also known as the average cost method.

The weighted average method can be determine in the different allocation  by using the two main factors are as follows:  

Therefore, Average cost method is the correct answer.

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