Average Costing - Adjustment

Business Central/NAV User Forum
1

Hi All,

I have a scenario which i require some advice:

My item is using average costing method.
On the SAME day, i post some transaction in the following sequence:

  1. Purchase order of new item A: Qty = 10, Unit cost = $2 (recieved & invoiced)
  2. Sales order of item A: Qty = 5, Unit price can be any amount (shipped & invoiced)
    At this point of time, my cost of goods sold = $2 each & stock on hand = $10.
  3. Purchase order of item A: Qty = 5, Unit cost = $3 (recieved & invoiced)

Now the problem comes after i post the second purchase invoice. My cost of goods sold for my original sales invoice is automated adjusted to $2.33 each.
Logically, my cost of goods sold should remain at $2 each since my sales invoice is already posted. But somehow, standard navision will do its own adjustments if the invoice happens on the same day.

Can anyone advise how to keep my cost of goods sold at $2 each? How to do the customization???

Thanks!!!

From desperate girl.

2

Hi

I am afraid this is the way average costing works in Navision, well at least version 4 from my experience. The average is “periodic” and therefore the cost of sales is correct as per the costing method chosen. Not much help I am afraid. I would guess that to re-write the way Navision handles average costing will not be simple or easy, there are so many transactional areas and posting scenarios to consider.

Was there any reason you chose not to go FIFO, which would have given you what you wanted?

3

The same question is asked on www.mibuso.com.

In the US, you can’t just switch costing methods out of the blue. It deals with taxes and how your CPA reports and calculate your profit and loss.