Item costing

Hi All

When i am making the sales order and from enquiry/Total, margin shows in -ve. I just want to know how the the system is making the costing of the item. I am using weighted average as “Inventory model group”. As when i was testing it by manually calculating the weg.Avg it is different from the system (Inventory value by dimension report Qty divided by value)

Please advise me.


Hi Imran,

Margin can be negative in case sales price is less than the weighted average price.

Can you please mention the entries that system has generated. ideally there should be 4.

The case which you stated is possible. To see the exact entry, run inventory recalculation for that item and look what adjustment system is posting.


yes sales price is less than the system costing that is why it is coming -ve. But i just want to know how the system is calculating i saw the purchase order their the purchase price is less than the sales price. on this item only purchase orders are created.

If we will see we are getting in loss. Can you please explain me in detail how the system calculate this.

Look at the on hand stock, track it back to teh transactions that created the stock, split each entry into a cost and quantity, total cost, total quantity and divide quantity by cost.

Create a new item, and PO, book 1 in at $10, Create a new PO and book 1 in at $15. Sell 1 and look at the transactions. You will learn the in detail by setting up simple scenarios and processing them through. No substitute for you doing it yourself to understand.