Hi Lydia,

I agree with your statement regarding standard costs but I'm skeptical about

the one regarding average costs. My understanding of the average cost

calculation in Vantage is that it is a weighted average. For example, say

you start with 10 units in stock with an average cost of $1.20, giving you a

total value of $12.00. Then, if you receive 2 new units with a cost of

$0.00, Vantage will calculate a new total value of $12.00 (12.00 + (2 *

0.00)) and a new average cost of $1.00 ($12.00/12 units). The end result is

no change in the total value of inventory of this part because Vantage

recalculates the average unit cost for the part. Of course, you would have

just created a variance from your standard cost, but that's the way standard

costs are supposed to work.

-----Original Message-----

From: Lydia Coffman [mailto:lcoffman@...]

Sent: Monday, August 21, 2000 4:55 PM

To: vantage@egroups.com

Subject: RE: [Vantage] Inventory costing

A word of caution (verified with our accountant): if you receive 2 parts

into inventory from manufacturing at $0, if that part has a cost already

associated with it(as in standard cost or average cost), your inventory

value will increase by the number of parts x the cost - even if the receipt

is at $0!!! So you are leaving your cost on the job, but your inventory

value still increases.

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

I agree with your statement regarding standard costs but I'm skeptical about

the one regarding average costs. My understanding of the average cost

calculation in Vantage is that it is a weighted average. For example, say

you start with 10 units in stock with an average cost of $1.20, giving you a

total value of $12.00. Then, if you receive 2 new units with a cost of

$0.00, Vantage will calculate a new total value of $12.00 (12.00 + (2 *

0.00)) and a new average cost of $1.00 ($12.00/12 units). The end result is

no change in the total value of inventory of this part because Vantage

recalculates the average unit cost for the part. Of course, you would have

just created a variance from your standard cost, but that's the way standard

costs are supposed to work.

-----Original Message-----

From: Lydia Coffman [mailto:lcoffman@...]

Sent: Monday, August 21, 2000 4:55 PM

To: vantage@egroups.com

Subject: RE: [Vantage] Inventory costing

A word of caution (verified with our accountant): if you receive 2 parts

into inventory from manufacturing at $0, if that part has a cost already

associated with it(as in standard cost or average cost), your inventory

value will increase by the number of parts x the cost - even if the receipt

is at $0!!! So you are leaving your cost on the job, but your inventory

value still increases.

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