Item costing by location

Hi there.

On the Inventory Setup screen, our setting for 'Average Cost Calc. Type is ‘Item’. We are interested in changing this to ‘Item & Location & Variant’

What would be involved in changing the inventory setup to by Item by Location?

Will it change the present average cost of each item, even though we haven’t yet setup or used the cost by location feature with different costs by item?

Is there anything else we need to be advised of prior to implementing this change?


U can change it after changing this make sure that u run the adjust cost Item entries and post inventory cost to G/L, but do this on backup copy of ur db. u will have to check with ur accounting dept in which period they would like all the new entries , period to which originally entry belongs or the current open period.

Yes it will change the Average cost of item. Y

if i purchase 1 item for $ 10 at location A

item 1 for $ 12 at location A

item 1 for 14 at location B

and 1 for 16 at location B

so average (assuming there’s nothing sent out)

at present ur avg would be (10+12+14+16)/4 = 13

after making the change (10+12)/2 = 11 at location A and (14+16)/2 =15 at location B

Now every time u will send something out, ur cost will work on the above calculation factors and ur COGS will change. That is why i said try on test copy first show it to accountants.