A "trended average actual cost," where cost moves across time, and as one observation is added to the data set, the oldest observation is eliminated, is an illustration of:
A) A zero-based average cost.
B) A weighted average cost.
C) A rolling average cost.
D) A geometric average cost.

Question

Quizplus · Accepted Answer

A rolling average cost, also known as a moving average, involves updating the average cost by adding a new time period while dropping the oldest one, thus keeping the time period constant. This method is useful for smoothing out short-term fluctuations and highlighting longer-term trends in data.

A "Trended Average Actual Cost," Where Cost Moves Across Time