User guide

66
If I order my Barcode Laser Scanners in boxes of 20 but my stocking unit is each,
I need to specify the cost of a box of 20 when I create the Order Unit Settings on
the Create New or Edit Item screen, Suppliers tab, as shown in the graphic.
When the item is received, InventoryControl will do the math and put in the cost
per item received. $3500 / 20 = $175 per Barcode Laser Scanner
Average Cost
Average Cost is calculated based on the costs of each of the items that are still in
inventory.
InventoryControl uses First In First Out (FIFO) to determine which items to
remove from inventory. If you added or received 50 Barcode Laser Scanners on
the 1
st
,8
th
, and 15
th
, you would end up with 150 scanners. If on the 17
th
you
remove 60 scanners, all of the scanners that came in on the 1
st
and10scanners
from the 8
th
would be removed because the scanners on the 1
st
where first in and
therefore first out. Next to be removed would be scanners from the 8
th
.
This also is how the average cost is calculated. If the scanners on the 1
st
cost
$300 each and the scanners on the 8
th
and 15
th
cost $320 and $315 each, the
average cost on the 16
th
would be $311.67.
50 Scanners * $300 = $15,000 (from the 1
st
)
50 Scanners * $320 = $16,000 (from the 8
th
)
50 Scanners * $315 = $15,750 (from the 15
th
)
---------
$46,500 / 150 = $311.67 average cost
On the 17
th
you removed 60 scanners so the average c ost will become:
40 Scanners * $320 = $12,800 (from the 8
th
)
50 Scanners * $315 = $15,750 (from the 15
th
)
---------
$28,550 / 90 = $317.23 average cost
Inventory valuation is calculated by multiplying the quantity by the average price.
The inventory value on the 16
th
is $46,500 or 150 * 311.67. After 60 are removed
the inventory value is $28,550 or 317.23 * 90.
Zero Cost Inventory
If inventory is added or received at $0, that quantity is ignored for average price
and valuation purposes. The only way s tock gets added at $0 is if you import
inventory or specify a $0 cost at add or receive time.