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Inventory Weighted Average Calculation

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Posted on by Mustafa Quraitem

Hi,

We use Weighted Average Costing method ;

If We have a Stock of "10" Qty from Item "A" ,

3 Nos issued in Favor of Project (X) in Sep'21

& then we Closed The Period ,

In Oct'21 A new Purchases received from Item "A" with Higher Prices & No Issues happened within Oct'21

As per my Understanding ; Only The On-hand Inventory will be affected with the New Prices & Since there is No Issues within Oct21 So there shouldn't be Cost debited to Project "X"

Is this True, Or The Inventory Calculation will affect also On the Previous "Coles" Period Issues?

Rgds

Mustafa

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Ludwig Reinhard Microsoft Employee on at

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Hi Mustafa,

Have you received an invoice updated the 10 pcs that you had in stock in September or did you receive the invoice just recently?

Also, what is the cost price that has been used when you took out the items from inventory and used them for your project?

Is this the price for which you purchase the items?

Best regards,

Ludwig

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Mustafa Quraitem 75 on at

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Hi,

The 10 PCs is Old Stock,

The Cost Price for the Issued Items in Sept'21 was KWD 100/- for Each (Total=3*100=300)

The On-Hand Inventory after Sept. 21 Closing is 7 Qty (10-3)

The New Shipment (Oct'21) Qty is (15) & The Price is KWD 140/- for Each Total (15*140=2100)

I am asking if the new WA Calculation will affect On Sept'21 Project Cost & Posted in Oct'21 Or the Impact will be Only On the On-hand Stock?

Rgds

Mustafa

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Ludwig Reinhard Microsoft Employee on at

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Hi Mustafa,

If you use the weighted average date valuation method then there should not be an influence.

In case you use the 'simple' weighted average valuation method then there might be an influence.

Can you check what valuation method has been selected?

Best regards,

Ludwig

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saurabh bharti 15,045 Moderator on at

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If you have performed inventory closing process along with recalculation, it will impact only on hand else it will impact other issues as well.

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