The Average Cost of Goods Sold (ACGS) Formula is an important calculation used to determine a company’s cost of goods sold. It’s a helpful metric to determine the true costs associated with a product or service and can be used to compare different products, services, or locations. It’s also useful for making decisions about pricing, inventory management, and more. The formula is relatively simple: take the total cost of goods sold in a given period and divide it by the number of units sold during that same period. This gives you the average cost per unit, which can then be multiplied by the number of units sold in future periods to determine the expected cost of goods sold. This formula is essential for any business that manufactures, sells, or distributes goods.