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Average cost calculation - Clarifications

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I am trying to identify the logic behind the average cost calculation. 

There are two items in the item list with a unit cost of Zero. Both the items do not hold inventory. There are transactions for both items. 

ItemUnit costInventory Costing method
Item 19004 average cost calculation
Item 18998 average cost calculation
What is the reason that item 19004 does not contain a unit cost, but item 18998 contains a unit cost?
  • Suggested answer
    Jun Wang Profile Picture
    Jun Wang 3,580 Super User on at
    Average cost calculation - Clarifications
    first and foremost, you need to make sure the costing in your BC is up to date. To achieve this, you can run adjust cost item entries. leave the filers blank, BC will true up for all items. Check your item card again to see if cost of 19004 is updated. 
    Even with a updated cost on item card, the unit cost is just used to calculate the total inventory value of invoiced and received not invoiced on hand inventory, so it is often misleading for users to use this number as the real unit cost. 
    how BC calculate real average cost for items depends on the setup on inventory setup page. Go there and take a look at the set up of . with different setup, BC has different behavior calculating the average cost of items
  • Suggested answer
    gdrenteria Profile Picture
    gdrenteria 2,786 Super User on at
    Average cost calculation - Clarifications
    You could see what settings you have in this option.
    Here you have very detailed information about the calculation that is carried out, I hope it can help you a little.
    Best regards

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