Average Actual Cost of an Inventory Item

DPS tracks an inventory item's average actual cost by calculating it each time an inventory item's quantity on hand or cost amount changes because of an inventory transaction posting.

DPS calculates the item's average actual cost using this formula:

New Average Actual Cost = [(Current Qty on Hand * Current Avg Actual Cost) + (New Qty on Hand * New Unit Cost)]/Total Qty on Hand

Tax, Shipping, and Extra Amounts

When the Inventory feature is active, the Line Items tab of Purchasing > Purchase Orders includes columns for Tax, Shipping, and any Extra Amount.

The Extra Amount column displays only if the Extra Amount is defined in Settings > Purchasing & Inventory > Company.

DPS uses any amounts you enter in these columns to recalculate the item's average actual cost. Click the Default Estimated Costs grid option in the Open to Voucher grid to put the line item's Tax and Shipping amounts in the Open to Voucher grid in Transaction Center > Create Voucher from PO.