Average Cost Issue

Hey guys I need your help on this in other for me to have accurate business data.
I purchase goods from a vendor at N4,300 (Nigerian currency) and after selling the goods off, I purchase another goods from the same vendor at N4,500 (Nigerian currency).

But when I check the average cost under the inventory tab it shows me ₦ 4,433.33 as the average cost with is not tally with the cost of goods purchase.

Is there any method or ways the average cost will be showing accurate figure?

You need to show copies of the screen involved as we are missing important information about the quanties and the sequence of the transactions all of which have a bearing on the calculation of the average cost

And are you tracking receiving and delivering the goods using Goods Receipts and/or Delivery Notes?

All the tests I have done, show that Manager calculates the average cost correctly

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@Najrash, the screen we need to see is the drill-down on Total Cost for the inventory item in the Inventory Items tab. This will show movement quantities, transaction amounts, running balance (from inventory on hand) and the resulting average cost.


The image above shows when the stock entered into the system

This second image shows the average cost of the goods in inventory tab which tally with the purchase amount

This third image shows that item has been completely sold out on the system

This fourth image shows another purchase from the supplier, with a new increased price

These fifty images show the average cost the system is now displaying. I want it to show the exact figure of the purchase price on the average cost as shown in images 1 & 2 above.

There are currently two problems as the system is not showing the exact inventory cost. 1. There will be a problem to know the real value of the available stock since the average cost is not accurate. 2. it will be adding excess to net profit because the purchasing price is N4500 and to be sold for N4600 to male N100 profit but as the average cost is showing N4433.33 that means the profit will be 166.67 if sold at N4600.

Please note: I have done series of testing with my testing company created to run testing before implementing it into my normal business account.

Please I need your help to make my data’s to be 100% accurate with my figures

@Najrash, you did not provide the screen shot that I told you was needed. All we know from what you provided is that on January 30th you bought 1200 units of item code P160G at two different prices. At some point, you apparently sold 400, but we don’t know how or when. You have spent a total of 5,320,000. Without any sales, that would give you an average cost of 4,433.33.

I suspect your test involved selling the 400 also on the 30th. Transactions in Manager are not executed in sequence. That is, they are not time-sensitive. Instead, all are assumed to be at the end of day. So, if you sold 400 units, it would have been at an average cost of 4,433.33. And all those remaining in stock have the same average cost. Thus, unless you show us something different, the program is behaving exactly as expected.

You are concerned about showing excess profits. But that will not occur. Your profit figure appears to be temporarily inflated because of your artificial example. You have calculated prospective profit only on the items remaining in stock. But you ignored those you already sold.

The way you want to calculate profit is 300/unit on the first 400 units and 100/unit on the final 800 units. That would give a net total profit of 200,000. Manager will calculate 166.67/unit on all 1200 units, for the same 200,000 profit. (Note that while Manager displays the average cost to two decimal places as 4,433.33, it actually calculates the cost to far greater precision. The average cost is displayed to the same precision as your currency is defined.)

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Thanks for your faithful comment, I just retry some things now and it solves my problem about the average cost…