Hi:
An end user has showed me how the cost of an item with the FIFO Costing Method (valuation method) has increased exponentially over time.
He's not sure how this increased cost has happened. This item is a component of an Assembly Bill of Material (BOM).
The Unit Cost in the Item Card is currently $4.179. If you click on the hyperlink for this figure, you're taken to the "Average Cost Calc. Overview" screen.
Scrolling in this screen back to September 2022 displays a Purchase at a Unit Cost of $10.05. The end user says that this purchase never happened.
Scrolling to January 17, 2023, there is a Purchase at a Unit Cost of $9.88. The Quantity is 89,985.328 for a Cost Amount (Expected) of $876,092.48!
On August 7, 2024, there was a Cost Adjustment at a Unit Cost of $4.14 and a Quantity of 54,397.024. This brings the Cost Amount (Expected) to $1,080,305.08! This inflated cost is what the end user is concerned about.
He thinks that this issue may have been caused by the item not having a correct Unit of Measure (UofM). Currently, the UofM is Square Feet. This is what displays on the Pick Instruction when the component's BOM needs to be made.
The one other component of the BOM has a UofM of Each. They think Each is what the UofM should be for this item whose inflated cost he's concerned about.
Is it possible to easily change an item's UofM? Would doing so even answer his question on this component's cost?
Thanks!
John
