Average cost when "Qty owned" is very small

1

Hello! Cloud user.

We use the “Inventory quantity by location” report for doing our stock take. In order to ensure every item shows up we have another inventory location with a tiny amount of the product. I’m not sure if this is needed anymore, but it was a workaround I used to ensure every report has the same amount of lines and make it easy to verify our stock.

Now regarding average cost, I just know that there have been a lot of changes over the last few months and that it caused some problems for various users.

For this item we have nothing in stock, except for the 0.0001 amount I have in an inventory location due to the reasons mentioned above.

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The “Average cost” says 12,400 USD because it’s “Total cost” divided by “Qty owned”.

When I click on “Total cost” it lists a bunch of production orders and write-offs.

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At this point I’m not even sure what my question is :joy:.

What needs fixing to get it correct? I see the balance isn’t 0. But why is is not 0? The starting stock is from 2019 and the transaction above are from 2021. So it was “0” then.

Any advice would be greatly appreciated.

2

Looks like you need to run Inventory Cost Correction Worksheet. Make sure to remove the Lock Date before running it.

1 Like
3

It doesn’t change anything. I don’t understand how the average cost for an item is for example 519.84 $

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But when I look at the “Total cost” number and sort by the highest “unit cost” it’s only 28 $

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How can my “Average cost” be almost 20 times higher than my highest recorded cost?

4

You need to write-off this balance.

As long as there’s a value and a miniscule Qty you’re going to have inflated unit costs