Purchase Price and Inventory Cost

[useful]

My understanding, that; ‘Purchase Price’ and ‘Inventory Cost’, are the same! I am not sure. need help, please
If true, then, when I Batch Create Inventory, batch includes ‘Purchase Price’ as well. Therefore; why do I have to re-enter during ‘Journal Entry’?
Regards, Naf

[Brucanna]

Purchase price is the initial price when creating the inventory on starting with Manager,
After that the purchase price (known as Average Cost) will change based on your Purchase Invoices.

If your opening inventory item - widgets was 100 @ 1.00 then you purchased 100 more at 1.10, then the average cost would 1.05. Therefore as Manager doesn’t know the price on the Purchase Invoice you need to input it.

But the question is, why are you using Journal Entry in relation to Inventory Purchase Price.
Journals are used on odd occasion for making adjustment entries, not for processing transactions.

[Tut]

Additionally, there could be non-purchase-price additions to inventory cost. See:

Allocating freight-in to the cost of inventory items when purchasing

When purchasing inventory items, freight-in represents the transportation cost associated with the delivery of goods from a supplier. For accounting purposes, the recipient adds this cost to the cost of the goods received. Let’s say you purchase an inventory item which has a $20 delivery fee. Rather than posting the $20 delivery fee to an expense account, you can add this cost to the cost of the inventory item. [image] By not entering anything into the Qty field of the second line item, the …

Manufacturing or assembling new inventory items

If you purchase raw materials to be used in the manufacture of finished goods, manufacturing orders can be used to record this process. Production orders allows you to record one or more raw material inventory items used to produce an item of finished goods. For example, manufacturing fruit juices requires fruits, bottles and lids purchased from suppliers as inventory items. These inventory items can be converted into finished products such as fruit juice bottles which are sold to customers. T…

[chirag1203]

Hi,
I would like to know if I can see the latest purchase price of an item in ‘Inventory items’ tab. This is really important to calculate the sell price which varies very frequently in my case.

[Tut]

In the Inventory Items tab, click on the blue Total cost figure for the item. In this example, we are looking up Chef Anton’s Gumbo Mix:

Select the most recent, relevant purchase invoice. If you want, you can use the Search function to simplify the process, but that is not necessary:

View the relevant purchase invoice to see how much you paid. Note that if you purchase from several suppliers, you might want to pick an invoice according to who you will buy from next: