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we are now encountering problem in inventory regarding the unit cost for an item. Upon receiving transaction the unit cost is correct, but upon warehouse transfer for each store the unit cost is changing. Please note the transfer transaction unit cost filed is disabled to change value.
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In Average Perpetual, the average cost is calculated by considering two main parameters, the in and out transactions and receipt date.
With every in transaction on the inventory, the average cost will be recalculated for the item on all purchase receipt layers. You may want to check illustrative details provided on the article;
"Information On the Enhancements Made to the Calculation of Average Cost in Microsoft Dynamics GP" on customer source.
Hope this helps,
my all item type is sales inventory and valuation method is "Average Perpetual". except few item all the unit cost is no variance.can you advice how can i rectify the issue and solve.
Actually, during a receipt, if the valuation method is standard, the items will be received at standard into inventory and issued at standard. Any differences between price paid and standard is written to PPV.
For Perpetual, layers are stored for each receipt, and, as was stated above by Mahmoud Saadi, if the stack is FIFO, the new receipt is placed at the end of the stack and the top of the stack is used to cost the issue. LIFO works the other way and might get you closer on the issues.
The Average valuation method will take the new cost and do a weighted average revaluation of inventory and issue at this new value.
Are you looking for an Actual Cost system where the cost you received items for is used during the issue? You would need to use one of the stack methods and lots.
Valuation methods and how they work are covered in our Inventory Management Techniques book. You might want to get a copy.
Just to add up, when entering increase inventory transactions (replenishment), the current cost defaults in the unit cost field. Although, you can simply change the cost. In this essence, the current cost will be updated after every increase transaction posted for the item.
On the other hand, when withdrawing items from inventory, the valuation method simply controls the unit cost.
Hi Refeesh Ali,
The Transfer entry considers Standard Cost or Current Cost based on the evaluation method setup for an item. And while receiving it considers the Current Cost. So this may be the reason for the difference you are getting with the 'Unit Cost'
When transferring items from one site to another site, the system will withdraw quantity as entered in the transfer entry, as for the cost, it will automatically be shown according to the valuation method of the item. In case the item has a FIFO perpetual, the cost will be considered from the first cost layer available in inventory.
Simply, when entering a transfer, it is not the user who detects the unit cost, but the system according to the valuation method. The cost you control is the cost at the inventory replenishment (Receiving, Adjustment In)
You could refer to the following article for further details on Inventory Valuation Methods
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