The Average Inventory Cost Method is a business practice used to determine the cost of goods sold, as well as the cost of products remaining in inventory. It takes into consideration both the purchase price of the item and any related carrying costs such as shipping or storage fees, then calculates a weighted average based on those values. By utilizing this method, businesses can manage their inventory more effectively, ensuring that they are able to account for all costs associated with their goods and remain profitable at the same time. In short, the Average Inventory Cost Method allows companies to keep track of their profits while also providing a more complete picture of their bottom line.