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If needed, you can manually allocate specific costs by creating Manual Cost Allocations. You must perform manual cost allocations before you run the period closing process. The accounts involved in manual allocations, will not be processes processed by the automatic allocations.
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Using this method, to find the average cost of specific item, you need to calculate the sum of all costs (including the additional expenses) and divide by the quantity of base units available for sale. The weighted average method is also used as a method for inventory valuation, see Inventory Valuation.
Each item with a serial number may have unique cost based on purchase price with additional expenses (if specified so) allocated in the basis invoice and history of transactions.
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If the Production module is enabled, the average costs of finished goods are also calculated. Generally, direct costs of finished goods are recorded by using the following documents:
- Production Orders
- Productions
- Goods Receipt Notes
- Inventory Transfers
- Bills of Materials
Depending on production processes established in your company, only some of these documents can be involved. Once the direct costs are calculated, the application adjusts the costs of finished goods in sales and return documents.
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For more details on allocations refer to Overview of Allocations.
Calculation of Actual Costs
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