Avg Cost

[shooterssportinggoods]

What is the Avg cost that shows up in Product Edit?  Why is it frequently much more than the cost?  Is it causing a problem with out our earning show as a negative?

[Courtright]

Average Cost is the "average" of the cost you set for an item in the Product Control Window.

If you go to Product Control and have an item, let's say it's a can of Soda for example.  It's retail price is $1.50 but under cost you put 0.50 cents.  Well if I understand it right, let's say a year ago your cost was set at .35 cents, now it's .50 cents but tomorrow it is going to go up to .60 cents and you religiously change it in the POS system as your cost is affected, then it will show you your "average" cost of the long run for that item.

One way to UPDATE this to current cost settings (which I prefer to do often as I adjust" is to go to Product Control and go to "Tools" and click "Set Avg Cost to Cost."  This will reset your cost for items to exactly what you currently have for each product.

Hope that helps

[ronaldrwl]

Avg Cost keeps an accurate cost.  It's updated when you take in inventory.  For example:

You have 5 item that cost $1.00 each.
Buy 10 more at $1.25 each.
Avg Cost is (5x1.00 + 10x1.25) / 15 = $1.17

[Lee]

Okay, so say that I want to receive into stock 10 of an item whose cost has changed.
Do I first go into Manager Control\Products\ProductControl and change the price in the record then use ManagerControl\Products\AdjustStock to update the quantities?  Or can one change the quantity field in the record when updating the new cost?

[ronaldrwl]

I mostly use the Purchase Order method of adding stock.  I think that is the easiest to place an order and receive it.  That updates the Avg Cost automatically from the supplier cost.

[Courtright]

I mostly use the Purchase Order method of adding stock.  I think that is the easiest to place an order and receive it.  That updates the Avg Cost automatically from the supplier cost.

Hmmm, this might be exactly what I have been looking for.  Can you give a brief tutorial/explanation on exactly what to do, how to use the Purchase Order method when getting in new inventory?  Perhaps when I looked at it before I didn't quite understand it fully.  Thank you

[ronaldrwl]

The PO allows you to construct an order.  It can help by showing what inventory is low.  Print out the order and give it to your supplier.  When the order comes you can change prices, backorder some items and receive the order.  This will add the received items to inventory and adjust the Avg Cost.

[peter@wolftackle.com]

Is there a way short of deleting an itema nd readding it to fix the average cost. AVG Cost often has innacurate costs from two different sources. Source one is if I duplicate a product with an average cost it picks it up. This is not always correct. Source two is from improper case break. An item that comes from case break now has an average cost related to the case price.

[ronaldrwl]

You can reset the avg cost.  In the Product Control window any item listed will be reset by using the Tools / Set Avg Cost to Cost.

[peter@wolftackle.com]

Is there a way to use the tool that does not duplicate every item in the list? Every time I have used the change all (fill in the blank) function it has created duplicates of every product in the list. I get tired of having to delete the duplicate items after fixing whatever else.

Avg Cost keeps an accurate cost. 

Could you help me understand why it shows us losing money every time I sell something sells for $5 which now shows a cost of $126.91 (each) and is built from an item in the case break quantity of 36 with a cost of $40. Both items were entered as new items (not duplicated from other items). The only other thing obviously impacting these products would be manually entering prices and quantities and then using PO to add inventory to the case once I understood how case break worked.