Why this average cost was calculated

Hello everyone,
My costing method is STD. But, we know that the average cost is calculated even in the STD state.
My concept of calculating Avg was very simple.
(Prev. Quantity x Prev.Unit Cost) + (Quantity Received x Receipt Unit Cost) / New Quantity On Hand
But, i was surprised that the average for this part was 437.50. I thought of course the 1100 would come out. Because I only bought it once for 1100.
I have attached the transaction history for this part. Can someone please explain why this value was calculated?
Thanks in advance
Part transaction history.xlsx (11.9 KB)

There is a caveat to this formula. If the QOH is negative, then it uses zero as the previous qty*prev unit cost. There is only one transaction in the spreadsheet that would have updated the average cost and that was the PUR-STK on 2019-12-27. (Only receipts to stock recalculate average cost.) So, I’m surprised the new average cost wasn’t 2,340.426. (1,100,000 / 470). However, there were five ADJ-CST records in that Transaction Log after the receipt date, so there’s no guarantee that the average was not changed during one of those. :person_shrugging:

Separately, this is why it is so important when using average or lot costing to make sure that transactions are done in chronological order.

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Thanks for the detailed explanation. But, the unresolved question is that no matter how I calculate it, it does not yield 437.50.
I tried calculating in the order of Trans Number (the order of input time), and I tried calculating it in various other ways.
Do you think it is correct that 437.50 is calculated? I only bought it once for the actual price of 1100.

On EpicCare search for ’ Values used from PartTran for the average cost calculation’ it might help you use a BAQ to determine how the average cost was determined and if it’s correct.

I’m not thoroughly convinced it was calculated. There are five ADJ-CST records where someone could have change it after the receipt. From what was shown, there is only one transaction that could have changed it and that was the PUR-STK one. :person_shrugging:

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Even if you work backwards, there is no integer that satisfies 1,100,000 / 437.51, even with rounding. 437.55 is the closest you get (qty is 2514).

Separately, I sorted the tran list by tran number (not date) and found that at the time of receipt, the OH qty would have been 2166 after receiving 1000.

So (1166 * 0.00 + 1000 * 1100) / 2166 = 507.85

Closer, but still not there.

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That ADJ-CST is an adjustment of the STD Cost. My company sets the costing method to STD Cost, and sometimes adjusts STD Cost.(For cost close to reality).
As far as I know, adjusting STD Cost does not affect Avg Cost. Is that right?
Then, there is only one Trans affecting this average cost, this PUR-STK.

Thanks for many help. I wanted to know that this average value (437.50~~) is a strange number that cannot be calculated, and now I am convinced.
So it might be my Epicor issue, so I’m going to submit this issue to the EpicorCare Support.

That is correct. BUT a user CAN change the Average cost as well as the standard in the same Adjust Cost command. I suspect that unless you can prove otherwise (through logging for example) that a user didn’t update the average cost then Epicor will say the system is working and it was user error. They may also claim that transactions were done out of order and then everything goes out the window anyway.

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I didn’t take into account that users may have manually adjusted Avg cost. So I looked at the Transaction Log, but only changed the STD Cost.
One question that arose while watching this is whether the ADJ-CST of STD and ADJ-QTY of quantity affect Avg Cost. Because other parts that have never been purchased also have Avg values. Those parts created initial stock with ADJ-QTY, then only ADJ-CST and STK-MTL.
Anyway, this is a very difficult issue for me.