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Stock Audit - Average Cost

The Average Cost tab shows transactions which effect the average cost. It shows the quantity of stock involved, the landed cost used in the transaction and the final calculated average cost. If you are receiving goods through the Invoice Matching form, you will see two transactions.

The first is the adjustment of average cost based on the quantity received and the amount we expected to pay. This is equivalent to the transaction that would have been generated by Goods Receipt form if we were receiving goods it in. The second is the adjustment of average cost based on the quantity received and the difference between what we expected to pay and what we actually paid.

The Avg cost gets changed in two scenarios :

1. If the COGS Method is set to 'FIFO' in the POS1 tab of System Settings and when there is two batches with different landed costs, when the transfer takes place from one location to another the Avg Cost is recalculated since the transfer goods would not have got transferred with Avg Cost. If the COGS Method is set to any other method in this scenario the Avg Cost will not change.

2. If the transfer is initiated and goods are sent at one price but not yet received at the requested location. In the meantime if another batch of goods is received with a different landed cost then the Avg Cost is recalculated. On receiving the goods the Avg Cost is recalculated for the sending location.

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