Average costing org not available in inventory item assigment organizations.

Hi
I have created an inventory organization ACO and set all the accounting and inventory parameters correctly. I have chosen the costing method for the inventory organization as Average.

Now I wanted to assign an inventory item to this inventory organization ACO in Master Items form. However I am not able to find the above average organization in the item assignment orgs.
Can someone tell if there is any setting that needs to be done so that I can assign the item to the average costing org ACO.

Thanks,Lakshmi N Jagarlapudi.