difference between Average cost and Unit cost .

gete

Hi,
I am working on Nav 4. 0 sp3.

I could not find any difference between Average cost and Unit cost .

So I am throwing some queries to understand about the exact difference.

I gone through the Help for the Fields Average cost and Unit cost.

Average cost = The program calculates the average cost on the basis of the Cost Amount (Actual) field plus the Cost Amount (Expected) in the Value Entry table. The amount in this field is then divided by the sum of the quantities in the Item Ledger Entry Quantity field.

Unit cost : If you selected a costing method other than Standard, the program uses the following calculation for the unit cost:
Unit Cost = Inventory Value of items on hand (expected cost + invoiced cost) / Quantity on Hand

Both fields contain the same meaning .

Then what is the difference.

AdamRoue

In a perfect world the unit cost is the average cost, but because of processing they are not, it is in part why the adjust cost item entry is run to update these. I do not have NAV currently, but you can easily create differences by receiving goods of an average costed item in stages, at different receipt costs on different days, then sell some. Then process the invoices with different costs at different times and see what happens, then of course run the adjust cost item routine.

I am not a programmer, but clearly from the help the unit cost ONLY looks at the stock you have on hand. The average cost looks at every entry ever made.

darshanm

Namaste!

actually speaking both values would be same. But unit cost will get updated on item card only when
item entry gets inovoiced(sales,purchase,adjustment).

e.g If GRN is made against PO, average cost is updated but unit cost will get updated