Inventory Costing Query

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Hi everyone,

We are currently using FIFO for our inventory. We would like to inquire how was the 5,208.33 been derived based on the Inventory transaction below.
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1st transaction is purchase of 100 qty at 100.
2nd transaction is issuance of 80, which leaves us 20 qty at 100.
3rd transaction is purchase of 100 qty at 105.
4th transaction is issuance of 50 (20 is from 1st transaction and 30 is from 3rd transaction).

Hope you could help us with this.

Best regards,
Edmond

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Ludwig Reinhard Microsoft Employee on at

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Hello Edmond,

If you select the inventory button in the form you shared and then select trace or cost explorer you can see how issues and receipts were mateched.

Can you check and possibly share those details?

Best regards,

Ludwig

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Brandon Wiese 17,788 on at

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FIFO is used during inventory recalculation to make inventory adjustments to financial value, but during daily transactions the value is determined by average cost.

In your case, after receipt of 100 ($10,000), an issue of 80 ($8,000), and another receipt of 100 ($10,500), you have 120 on-hand with value $12,500, for an average cost of $104.1667.

The next issue of 50 at $104.1667 average cost has a total value of $5,208.33.

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Hi Ludwig,

Thank you for your input. I have checked the Trace and Cost explorer and both did not provide the exact data we need.

Hi Brandon,

This is exactly what I need. Thank you for your help!

Best regards,

Edmond

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Ludwig Reinhard Microsoft Employee on at

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Hello Edmond,

The calculation from Brandon is pretty cool and can help you identifying the costs in this simple case.

However, in case you have thousands of transactions with different status such a manual calculation might not be possible.

In the long-term with an increasing number of transactions recorded you might have to search for alternatives how to identify the FIFO values.

That is not an easy task but the trace and cost explorer might help if you display the cost amounts.

What might help also is the settlement report that you can find in the inventory closing and adjustment form.

Just take a look at it and whether it might be something that you can use in the future.

Best regards,

Ludwig

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Community Member on at

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Hi Ludwig,

I have checked the settlements, the trace and cost explorer but it doesn't contain any logic behind on how the amount 5,208.33 was derived. It does contain information though that will be helpful to us to some extent. Appreciate your inputs!

Best regards,

Edmond

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