Product Average cost

Hello guys im meeting with a new problem.

I have a distributor who sends me 2 types of products, ones that weight 100grams and others 140grams,
my problem is that i use a freight in for shipping calculations which ones are based on the product weight.

After making that invoice in my inventory y have not precise numbers in the product costs in consecuence of the different weights they have.

Any ideas to make this work will be really good!

Thanks

Read this Guide: https://www.manager.io/guides/9610. Use the manual method.

Yes ive seen that,

The problem is that i purchase more than 30 products of each per invoice, and must make proper calculations as i also have fees included that affect the whole price leaving aside the shipping

You can mix the techniques on the same purchase invoice. For fees that are apportioned among all line items based on relative amounts of the line items, use the automatic method (entering the Freight-in item). For fees that apply only to one line item, use the manual method.

For example, assume you buy inventory and have associated costs as follows:

• 20 units of A at 5 each, weighing 0.1 kg each
• 30 units of B at 10 each, weighing 0.2 kg each
• Shipping cost of 50, to be allocated by weight
• Insurance costs of 100, to be divided according to cost

So, total cost is 550. Total weight of A is 2 kg. Total weight of B is 6 kg. And total weight of shipment is 8 kg. The purchase invoice would be entered as below. Notice I have used the new calculator feature in the `Unit price` field. Lines #1 and #2 are standard inventory item entries. Lines #3 and #4 are manual entries of freight-in. Line #5 is an automatic entry of freight-in, distributed across all inventory items with quantities according to the figures in the `Amount` column:

The completed purchase invoice looks like this:

With no other inventory transactions, the Inventory Items tab list looks like this:

As you see, average cost of A includes the 5 base cost, weight-based shipping of 0.625 [50 / 8 * 2 / 20 = 0.625], and a 1.25 share of insurance [100 * 100 / (100 + 300) / 20 = 1.25], for a total of 6.875. The average cost is rounded to two decimal places for display as 6.88. Item B is costed by similar methods. The total value of Inventory on hand equals the total of the purchase invoice, because there are no other transactions in this test business.

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Wow ! that calculation feature is awesome!

Thanks so much for the example, really helped out to clarify my mind,

But my problem continues becouse i have 30 different items that weight 100grams, and 20 items that weight 140grams.

As far as i understand, i should generate 50 new lines for making freight in calculationsâ€¦ isnt a better way for doing it ?

Then I would suggest that doing Freight-In via weight is not that practical, yes the alternative will cause an over / under allocation of Freight per Inventory Item but will that make such a â€śsignificantâ€ť variation to the Inventory Items Average Cost.

You could create one purchase invoice for the 100g items and a separate purchase invoice for the 140g items and proportion the Freight-In charge on each invoice based on weight.

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