Difference between revisions of "Inventory: Understanding Average Cost"
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Inventory with a sale reversal, but keeping it positive! All good, but sequence matters | Inventory with a sale reversal, but keeping it positive! All good, but sequence matters | ||
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If sale and reversal are together - it doesn't matter the sequence! | If sale and reversal are together - it doesn't matter the sequence! | ||
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| S || -200 || 70 || 16.42857143 || -3285.714286 || 1150 || 16.42857143 | | S || -200 || 70 || 16.42857143 || -3285.714286 || 1150 || 16.42857143 | ||
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Revision as of 18:38, 25 October 2023
Simple Case
Inventory Simple Case - Avg Cost IS impacted by Sequence!!!
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Inventory With Reversal - All Positive
Inventory with a sale reversal, but keeping it positive! All good, but sequence matters
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If sale and reversal are together - it doesn't matter the sequence!
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Inventory With Sale/Reversal - Gets Negative
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Similar to the case where items were positive, the impact of matching Negative and Postive record have no net effect even when the accumlative qty goes negative:
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If a purchase comes between a negative sale and reversal, the ending avg. cost is impacted, but this is still perfectly acceptable and correct handling for the data given.
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