The Weighted-Average Cost method is the midpoint or a combination of the FIFO and LIFO methods. According to this method, the cost of goods available for sale is divided by the number of units available for sale and is commonly used when inventory items are so melded or identical to each other that it is impossible to assign specific costs to single units.
A significant advantage of using the weighted average cost method that it is the simplest way to track inventory expense. You can just mark up the average price of the stock units instead of tracking the initial cost.