Exchange rate issue with purchase against cost of goods sold

Hi, my company based currency is SGD, some of the purchase & sales are in USD.
Example: when my purchase in Sep 2020 is US$47,000 @ 0.736756 = S$63,793.17, when my item sold, I expect the COGS also S$63,793.17. But the COGS in system shown S$63,896.54 instead of S$63,793.17. Anyone know what cause the dispute? Thanks in advance.

Cost of goods sold does not equal the purchase price for those particular goods. It is calculated from the average cost of that inventory item at the time the sale is completed, taking into account your entire purchase history for the item. Inventory is always valued in your base currency. But if you bought it in a foreign currency, exchange rates come into play in determining what the base currency cost is. And whether or not you forced an equivalence can also come into play. To understand the cost attributed to a single sale, you must trace the history of the item back to a point where you had none, looking at every transaction. This is not something that can be done remotely. You will need to do this yourself. It can be painstaking work.

1 Like