What is the formula for calculating the average cost?

Okay, so, average cost… How do you figure that out? It’s actually pretty straightforward, even if it sounds kinda technical. Basically, you take the total cost of making something – like, say, all the money that went into baking a batch of cookies, including ingredients, electricity for the oven, even the little bit of wear and tear on your mixer – and then divide it by how many cookies you ended up with.

So, yeah, it’s like this:

Average Cost = Total Cost / Number of Units

See? Not so scary, right? It’s like, if I spent $10 on ingredients and stuff to make 20 cookies, my average cost would be 50 cents a cookie ($10 / 20 cookies). Makes sense, doesn’t it? I remember once I tried to calculate the average cost of making these fancy cupcakes for a bake sale. I factored in everything, like the fancy sprinkles and the special cupcake liners. Let’s just say I learned a valuable lesson about pricing! It turns out those sprinkles were expensive. Anyway, now I’m much more careful about tracking my costs… who knew baking could be so… mathematical? ????

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