Hi, We have selected the costing method as ‘AVERAGE’. However, it is observed in this case that the cosnsumption entries are not getting assigned to any of the inbound Item ledger entries sucha as Purhase and Postive adjustment. When you click on applied entries, it shows blank. can any body explain why? Further the cost is not getting posted to FG inspite of completing all the activities including running of Inventory batch jobs. An early reply is higly appreciated. Thanks and Regards. Vijay
What version are you running?
Hi, Inventory is not decreased ‘FOR AVERGE COST CALCULATION’ when you do consumtion. Let say you have: purchase 100 pc with cost $50 ave = 50 consum 50 pc with cost $50 ave = 50 ___________________________________ Purchse 100 with cost $60 ave = 55 50 pc consumed will be deducted from inventory when production order is closed… (deducted from inventory - i mean deducted for average cost calculation) This is practically impossible to explain to normal person but accountants normally would understand… The Idea behind it - WIP is also inventory - inventory transfer sould not change inventory value - consumption is nothing else as inventory transfer from accounting point of view…
Hi, In this case, when consumption if posted, raw material inventory is reduced and WIP inventory is increased. This should be reflected in the relevant G/L accounts. If this is not happening then there is a problem in setup. Further, in Ver 3.7, if you are not using expected cost posting WIP inventory does not get updated unless all purchase receipts are invoiced. We have come across this problem while using FIFO. I am not sure if same applies to average cost valuation method.