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Evo-ERP and DBA Classic >> Items >> DBA Average Cost Calculation
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Message started by podell on 07/09/08 at 05:12:44

Title: DBA Average Cost Calculation
Post by podell on 07/09/08 at 05:12:44

Does anyone know in DBA what constitutes a "Period" in the average cost calucaltion of inventory. We have had a couple of negative transactions on some of our parts and the average costs seems to be way off from what we think it should be. Does DBA go back to the first purchase of that particular item, or does it just go back one year? one month? or does it go back to when that particular inventory was at zero levels. Please advise.
:-/

Title: Re: DBA Average Cost Calculation
Post by GasGiant on 07/09/08 at 06:09:50

It averages based on pieces in inventory, not time. So...

First PO 10 pieces at $1 each, Avg = $1

Second PO 10 pieces at $1.10 each + 2 each of the $1 pieces left in stock means that it cost you $13 total for the 12 pieces you now have in stock, giving an average of $0.9231 per piece.

Now, what do you mean by "negative" transactions?

Title: Re: DBA Average Cost Calculation
Post by podell on 07/09/08 at 11:54:46

The negitive transactions are for instance:
Pounds of steel plate received incorrectly and then un received and wrong amount then re-recevied at correct pounds. If you look in transaction history it shows the in and out of this transaction but it seems to mess up the average cost calculation? Shouldn't it have returned the average cost to the prior of this entry with the two transactions of in and out balancing each other out and then the new re-entry would calculated the new average cost. Hope you understand what Im trying to say here?

Title: Re: DBA Average Cost Calculation
Post by GasGiant on 07/09/08 at 12:25:59

If you are working with a PO then it should go out at the same price it came in, but you need to make sure. If you are making adjustments to correct the mistakes then you will always be removing items at the average.

On the other hand, you can correct the last and average costs in IN-K and then run UT-K-G to correct the value of the inventory, which will give you a figure for the GL correction.

Title: Re: DBA Average Cost Calculation
Post by dameng on 07/21/08 at 12:30:14

the "period average cost" if you are referring to what is on the IN-E print Inventory transaction report, is the Period for the Date Range you've selected.

hence, if you leave the date range blank so it's all inclusive, then it will give you an Average Cost for the entire life of that Item. if you've selected a shorter time frame, then it's the Average Cost within that time frame.

this Period Average cost is different in that respect than your normal Average Cost, so you can actually use it for realizing a trend.

hth