Average Costing Method

Yahoo Archive
1
We use both Average Costing and Lot Tracking. We do not allow
negative inventory, but I will be glad to discuss either or both
with you off line. (We also do Dimensional Tracking on a few parts,
which took a long time to work out the kinks.)

The best suggestion has already been made. Try everything in a test
database.

Michael Randolph
Purchasing Manager
American Magnetics, Inc.


--- In vantage@yahoogroups.com, Rough Brothers <roughbros@y...>
wrote:
> Does anyone use the average costing method? If so, can I get a
brief explanation. Understand conceptually but want to know more
specifics.
>
> For example, how do receipts and issues effect the average costs?
>
> We currently allow inventory to go negative .... does this effect
average cost?
>
> How does freight and additional charges get into average cost?
>
> Any guidance would be appreciated.
>
>
>
>
>
> ---------------------------------
> Start your day with Yahoo! - make it your home page
>
> [Non-text portions of this message have been removed]
2
Does anyone use the average costing method? If so, can I get a brief explanation. Understand conceptually but want to know more specifics.

For example, how do receipts and issues effect the average costs?

We currently allow inventory to go negative .... does this effect average cost?

How does freight and additional charges get into average cost?

Any guidance would be appreciated.





---------------------------------
Start your day with Yahoo! - make it your home page

[Non-text portions of this message have been removed]
3
We went from standard to average in 2000. We wish we could go back to
standard. The problem comes in
When every receipt renets the average cost. So if costs are in error,
or missing, you are going to have
A costing problem. We have reports where we look at all receipts (both
purchasing and manufacturing) from
The previous day to try to head off problems. Watch out for zero cost
receipts. Of course, your receiving
Folks can override manufacturing costs at receipt time. In some cases,
accounting looks at the production
Detail reports before receipts can be made.
Good luck

Subject: [Vantage] Average Costing Method

Does anyone use the average costing method? If so, can I get a brief
explanation. Understand conceptually but want to know more specifics.

For example, how do receipts and issues effect the average costs?

We currently allow inventory to go negative .... does this effect
average cost?

How does freight and additional charges get into average cost?

Any guidance would be appreciated.
4
Further to answer one of your questions, yes, when your quantity goes
negative, it will reset the average cost based on the first
receipt/adjustment that brings the quantity on hand positive (this can
be viewed as a positive since it will clear up any past costing errors).
If you do find a costing error (typically for us, this is caused by the
receiving department receiving in the wrong unit of measure - receiving
pounds when the PO was in sheets or vise versa). Once found, the
average cost can be reset to what it "should" be.



Thanks!



Rick Ludwig



-----Original Message-----
From: vantage@yahoogroups.com [mailto:vantage@yahoogroups.com] On Behalf
Of PLAMAN DICK
Sent: Tuesday, July 19, 2005 9:59 AM
To: vantage@yahoogroups.com
Subject: RE: [Vantage] Average Costing Method


We went from standard to average in 2000. We wish we could go back to
standard. The problem comes in
When every receipt renets the average cost. So if costs are in error,
or missing, you are going to have
A costing problem. We have reports where we look at all receipts (both
purchasing and manufacturing) from
The previous day to try to head off problems. Watch out for zero cost
receipts. Of course, your receiving
Folks can override manufacturing costs at receipt time. In some cases,
accounting looks at the production
Detail reports before receipts can be made.
Good luck

Subject: [Vantage] Average Costing Method

Does anyone use the average costing method? If so, can I get a brief
explanation. Understand conceptually but want to know more specifics.

For example, how do receipts and issues effect the average costs?

We currently allow inventory to go negative .... does this effect
average cost?

How does freight and additional charges get into average cost?

Any guidance would be appreciated.




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[Non-text portions of this message have been removed]
5
My .02 I played with the test database or better yet create a 3rd db which
is a copy of your live db and tests every possible transaction and trace it
with WIP and production detail reports.

Frank Zeigafuse
Innovative Office Products
General Manager
Direct Phone: 610-559-6369
Email: fzeigafuse@...

Visit www.one.org to see how the world can be changed one person at a time.



-----Original Message-----
From: Rough Brothers [mailto:roughbros@...]
Sent: Tuesday, July 19, 2005 10:49 AM
To: Vantage Users
Subject: [Vantage] Average Costing Method


Does anyone use the average costing method? If so, can I get a brief
explanation. Understand conceptually but want to know more specifics.

For example, how do receipts and issues effect the average costs?

We currently allow inventory to go negative .... does this effect average
cost?

How does freight and additional charges get into average cost?

Any guidance would be appreciated.





---------------------------------
Start your day with Yahoo! - make it your home page

[Non-text portions of this message have been removed]



Useful links for the Yahoo!Groups Vantage Board are: ( Note: You must have
already linked your email address to a yahoo id to enable access. )
(1) To access the Files Section of our Yahoo!Group for Report Builder and
Crystal Reports and other 'goodies', please goto:
http://groups.yahoo.com/group/vantage/files/.
(2) To search through old msg's goto:
http://groups.yahoo.com/group/vantage/messages
(3) To view links to Vendors that provide Vantage services goto:
http://groups.yahoo.com/group/vantage/links
Yahoo! Groups Links