Is there a way to have the average cost on an item only be affected by a certain subsidiary? We're finding that our sales to a child company of ours, is affecting the Avg cost of an item, however, we still need the average cost, but need it averaged by only certain subsidiaries.

Not sure what you're asking as it is totally normal to have the average cost be affected by the purchase of an item from another subsidiary (it is the same as buying from outside the company). Having said that, if you want the transaction to be a net 0$ change on your average cost, then the sale/purchase should be exactly equal to the average cost of the item.