Average Costing -COGS

manas123

In case avg.costing method where system posts the diff. ? May be my question is very basic but would like to throw some light on this.

e.g. RM 100
Cap cost 10

Now WIP is having cost of 110 and assuming order is finished then system will post COGS on wt.avg from Item card? e.g. 120 (assuming earlier transactions have taken place) then where does system posts Rs.10/- . or what about the diff.
i.e. WIP will be credited by Rs.120 and FG will be debited by Rs.120 (but WIP is having value of Rs.110)

Thanks in advance

Manas

kapil4dynamics

It will post an adjustment to Inventory A/c to COGS Account.

Alex_Chow

Run the adjust cost - item entries process and the cost will be adjusted accordingly.

AdamRoue

manas123 wrote:

In case avg.costing method where system posts the diff. ? May be my question is very basic but would like to throw some light on this.

e.g. RM 100
Cap cost 10

Now WIP is having cost of 110 and assuming order is finished then system will post COGS on wt.avg from Item card? e.g. 120 (assuming earlier transactions have taken place) then where does system posts Rs.10/- . or what about the diff.
i.e. WIP will be credited by Rs.120 and FG will be debited by Rs.120 (but WIP is having value of Rs.110)

Thanks in advance

Manas

Ultimately, with all flags considered, the average cost will be adjusted on the COGS through the Value entries. You can test this by processing an example exactly as you describe, finishing production after the sale and running the adjust cost item entry routine to see the end result against the sales entry in the item ledger entry.

manas123

Thank you all .

Manas