This video will explain the average cost method. The average cost method, also known as the weighted average method, is one of three popular inventory valuation methods. In the average cost method, the weighted average of all inventory purchased in a certain period is used to assign value to cost of goods sold, as well as the cost of goods still available for sale. The benefit of using the average cost method is that it requires minimal labor to apply, therefore costing companies less money. To learn more about the average cost method, watch this video.