AVERAGE COSTING

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 GAYAKAVADA PAVAN KALYAN RAO

                       AVERAGE COSTING

 

AVERAGE COSTING: Under average costing, all asset purchased items in inventory are valued based on their purchase order cost. This results in item unit costs that reflect the weighted average of the purchase order unit costs for all quantity on-hand. There is only one average unit cost for each item in an organization.

 

v Here when the Retailer Purchase material from supplier price will get Updated

v When the Retailer sells the product to customer price will not get Updated.            

Now we need to define the COSTING

NAV-> INV-> setup-> organization-> parameters

Give the Costing Method: Average

 Save the record   

Now we have to create the Item

NAV->INV->Item->Master item

Now we have to define the Average Item cost

NAV->INV->Costs->item costs

Click on the NEW tab

Now we have to give the item and cost type is average rates and click on the COSTS tab

Here we have to give the cost element, Basis, Rate or Amount then save the record

Now we have to perform the transaction

NAV->INV->Transactions->Miscellaneous Transaction

In Transaction select type as Account Receipt then click on the TRANSACTION LINE tab

Here we need to give the Item, sub inventory, quantity, Unit Cost then save the record

Now we have to check the cost of the Item

INV->NAV->Costs->Item Costs

Give the item then click the FIND tab
Here click on the OPEN tab

Here we can see the cost of the item

Now add some more stock to the item and give Unit Cost

Now check the cost of the Item

Now Issue some stock for that Item 

NAV->INV->Transactions->Miscellaneous Transaction

In Transaction select type as Account issue then click on the TRANSACTION LINES tab

give the details as shown below

here we have to give the item cost is 60

Now check the cost of the item

Here cost should not update whenever we perform Transaction Issue

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