Original cost calculation
This article describes how the original cost is defined for each store transaction (i.e., for each row of a transaction).
There are two ways to define it: by average cost and by specifying the cost in the parent document.
Which way will be used is determined by the business process (procurement, production, transfer, sale) the transaction is created for. It depends on other modules and their respective documents, which are the main documents in the transaction flow.
The Cost source field defines which method is used. For more information, see Goods cost.
Average cost
It is used when the Cost source field is set to store. These are usually the issue transactions in the store. The only receipt transactions with this source are generated by Reconciliations. Тo define the cost of the current transaction, the following is performed:
All valid store transactions are gathered. They are non-voided or (at least) released transactions and contain the same product, store and enterprise company which date to before the current transaction. The order of the transactions is defined by the transaction timestamp. If there are multiple transactions with the same transaction timestamp, the receipt transactions are ordered before the issue transactions.
The unit cost is defined in all currencies (see Goods cost) from p.1.
The unit cost is multiplied by the quantity in the row and the result is saved as a cost in the current transaction (in all currencies).
Example 1:
For a specified product, store and enterprise company, there are transactions listed below. For issue transactions, the average cost method is used.
In the beginning, there are two receipt transactions:
receipt, Timestamp: 01 Dec 2020 12:45, 4 PCS, total cost: 100;
receipt, Timestamp: 01 Dec 2020 17:27, 3 PCS, total cost: 61.
These two transactions define the unit cost as (100 + 61) / (4 + 3) = 23. The result is used in the next issue transaction:
- issue, Timestamp: 03 Dec 2020, 11:29, 5 PCS, total cost: 5 * 23 = 115;
Then, there is a receipt transaction:
- receipt, Timestamp: 04 Dec 2020 15:33,6 PCS, total cost: 146;
The average cost is (100 + 61 - 115 + 146) / (4 + 3 - 5 + 6) = 24. This cost is used in the next issue transactions. Note that the first issue transaction happens at the same time as the receipt transaction, but the receipt transaction is considered before the issue transaction. Because of this, the cost of the issue transaction is affected:
issue, Timestamp: 04 Dec 2020 15:33, 2 PCS, total cost: 2 * 24 = 48;
issue, Timestamp: 07 Dec 2020 09:54, 1 PCS, total cost: 1 * 24 = 24.
This example illustrates a case where the product cost is not affected by the presence or absence of a lot. Even if different lots exist in the transactions, the cost is an average. There are products required to have individual costs for each lot (this is described in the product's definition). The principle above is then changed, and in p.1 we take into account transactions that also have a matching lot field. An empty value (no lot) is considered a valid/separate lot.
Example 2:
There is a receipt transaction with two lots (so there are two receipt store transactions):
receipt, lot #1, Timestamp: 01 Dec 2020 13:15, 10 PCS, total cost: 120;
receipt, lot #2, Timestamp: 01 Dec 2020 12:15, 8 PCS, total cost: 96.
The unit cost for both lots is 12. Then come the following issue transactions:
- issue, lot #1, Timestamp: 01 Dec 2020 14:28, 3 PCS, total cost: 3 * 12 = 36.
The next receipt transaction is only for lot #1:
- receipt, lot #1, Timestamp: 02 Dec 2020 10:30, 7 PCS, total cost: 98;
Now lot #1 has a unit cost of (120 - 36 + 98) / (10 - 3 + 7) =13, while the second lot has a unit cost of 12.
issue, lot #1, Timestamp: 05 Dec 2020 17:20, 4PCS, total cost: 4 * 13 = 52;
issue, lot #2, Timestamp: 05 Dec 2020 11:12, 5 PCS, total cost: 5 * 12 = 60.
Specifying the cost explicitly
This is used when the cost source is set to "Document". This is the source of all receipt transactions, except for the ones generated by Reconciliation. For each receipt transaction, the cost is calculated separately and according to a formula/calculation that is specific to the current business process. The method involves calculating a number in the document currency (the cost is in only one currency). Then, this number is converted into the rest of the cost currencies (see Goods cost).
A more complicated example is when the cost of the goods is defined by the issue transaction cost of other goods available in the same enterprise company. It is not required to receive the goods from the same store. When transferring goods from one store to another, the issue transaction has a standard average cost. However, the goods received in the second store have to be entered with a cost equal to the one from the first store issue (a greater cost may be set if there are transport or other expenses). The same principle is applied when returning sold goods from a client or receiving back a rented asset.
Another example is the production, where the cost of the produced products is formed by the costs of the ingredients, salary expenses, and more.