About the Average Unit Cost

About Order Cost | Enter/Edit Costs | Price/Cost Relationship

Basic

Note: The ability to see cost fields, including margin and markup and other fields related to cost, can be controlled by security rights. If you do not have the right to view item costs, the fields will be masked like this "*****". This right affects cost fields in inventory and on all documents and reports.

The Avg Unit Cost field in inventory reflects the average cost you have paid for the current on-hand quantity of an item.

Point of Sale recalculates the average unit cost each time you receive additional quantities of the item at a different cost by proportionally averaging the old cost and the new cost. Receiving vouchers update your Point of Sale inventory and, if applicable, your QuickBooks financial software inventory value with item cost changes.

For example, if you have five shirts on hand with an average cost of $10 and you receive 10 more shirts costing $12 each, the new average unit cost is calculated as follows:

(On Hand Qty Current Cost) + (Rcvd Qty Purchase Cost)
On-Hand Qty + Rcvd Qty

Or, using the example above:

(5 10) + (10 12) 5 + 10 | = | 170 15 | = | New average unit cost of $11.33

We recommend that you not manually enter or edit the average unit cost. Point of Sale uses this value to send cost of goods sold information on item sales to your QuickBooks financial software. If it does become necessary to edit this value manually, typically to correct an error, see Creating an Adjustment Memo.

Related Topics

Tracking decimal costs