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        <a class="WebWorks_Breadcrumb_Link" href="inventory.10.1.htm#1101173">Inventory</a> &gt; <a class="WebWorks_Breadcrumb_Link" href="inventory.10.2.htm#1101173">Creating items</a> &gt; Average Cost, Last Cost and Standard Cost</div>
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      <blockquote>
        <div class="hm_ModuleHeading"><a name="1101173">Average Cost, Last Cost and Standard </a>Cost</div>
        <div class="b_Body"><span class="eb_EmphasisBold"><a name="1101176">Average Cost</a></span> is calculated as the total cost of an item (the total amount you have paid to purchase the item or the cost entered when you transferred the item into stock) divided by the number of units of that item you have on hand.</div>
        <div class="b_Body"><span class="eb_EmphasisBold"><a name="1101179">Last Cost</a></span> is the most recent purchase price for the item.</div>
        <div class="b_Body"><span class="eb_EmphasisBold"><a name="1101180">Standard Cost</a></span> can be used instead of the last purchase price as the default price on purchases. To use the standard cost price as the default price, select <span class="w_Widgets">Use Standard Cost as the Default Price </span><span class="w_Widgets">on Purchase Orders and Bills </span>option in the <span class="w_Widgets">Preferences</span> window (<span class="w_Widgets">Inventory </span>tab).</div>
        <div class="href_ReferenceBlockHeading"><a name="1157388">Related Topics</a></div>
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                  <span style="color: Gray;">■</span>
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                <div class="bbi_BulletedIndented_inner"><span class="l_Link"><a href="inventory.10.2.htm#1106276" name="1157392">Creating items</a></span></div>
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                  <span style="color: Gray;">■</span>
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                <div class="bbi_BulletedIndented_inner"><span class="l_Link"><a href="inventory.10.10.htm#1088426" name="1157396">Setting item prices</a></span></div>
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