Adj. cost Item Entries - with Average Cost per Item&Loca

bogdandum

I have set up a company with Average cost calc. type = Item & Location & Variant. There are a few locations defined.
Adj. cost Item Entries batch does not work as it shouls in this situation.
Example:
10 Oct Receipt (Purchase) in Location X of Item 1 with costing method Average Cost (same posting date)
15 Oct Receipt (Purchase) in Location X of Item 1 with costing method Average Cost (same posting date)
20 Oct Transfer Item from Location X to Location Y (same posting date)
25 Oct Transfer Item from Location X to Location Y (posting date 12 Oct)
Run Adj. cost Item Entries batch job - nothing happens (it should correct transfer from 20 Oct with a new average cost)
If a Receipt (Purchase) is posted with a posting date of 11 Oct, Adj. cost Item Entries batch job will adjust everything.

How can this be solved? Can Adj. cost Item Entries batch job make adjustments after a transfer?

Thank you for your help!

chaswin

This probably has something to do with the back dated calculation of the average cost as at the posting date. (12th Oct). Can you supply the actual costs of each purchase and indicate if location Y already had stock of item 1?

bogdandum

Location Y had stock quantity=0 for item 1.
I have tested this situation with various purchase costs - it has no influence. I noticed that Adjust cost only make adjustments if an inbound transaction (purchase or positive adjustment) is posted with an older date. Adjustments are not made if inventory decreases (transfers and negative adjustments) are posted with an older date.

chaswin

OK. I've just run the same data through Cronus 3.6:

10/10 BLUE WH PI for 100 at 10.00
15/10 BLUE WH PI for 100 at 15.00 New average is 12.50

20/10 BLUE WH Transfer 50 To GREEN Ave Cost Used 12.50.
12/10 BLUE WH Transfer 50 To GREEN Ave Cost Used 10.00

Note that the correct cost was used for each transfer at the time of posting. Running the adjust cost therefore had no effect.

INVENTORY VALUATION - Cost Specification (Report 5801)

BLUE WH 100 on hand at 13.75 = 1375.00
GREEN WH 100 on hand at 11.25 = 1125.00

Total Valuation 200 at 12.50 = 2500.00


As far as I'm concerned this is perfectly correct.

I then issued 10 out of each warehouse. The journal showed a unit cost of 12.50 for each line, but the actual posting took place at 13.75 out of BLUE and 11.25 out of GREEN. Again there was no adjust cost effect.

The only thing that was strange was with report 1001, the Inventory Valuation. This showed transactions for BLUE perfectly correctly. (Increases of 200, decreases of 100). But for GREEN, it showed the movement into the warehouse as a decrease! Although the Value was then shown as a positive amount.

Please check the unit cost in each of the value entries related to the transfers. One last thought - have the two receipts been invoiced?

bogdandum

If this transactions would be posted in the posting date it should look like this:

10/10 BLUE WH PI for 100 at 10.00
12/10 BLUE WH Transfer 50 To GREEN Ave Cost Used 10.00

15/10 BLUE WH PI for 100 at 15.00 New average is 13,33!

20/10 BLUE WH Transfer 50 To GREEN Ave Cost Used 13,33!

Running the adjust cost (after posting as in the first example) should make adjustments to meet this figures. Shoudn't it?

Every transaction is full invoiced when posted.

chaswin

I've justed tested in 3.7 and get the same results.

If you go into the value entries table, show all and then filter on this part number, you'll find that purchases are listed before transfers out and other negative adjustments.

I think what is happening is that in calulating the average cost, it processes all the purchases (and probably positive adjustments as well) before it processes the negative transactions. I had thought that the system only did this for transactions on a single day, but it looks as if it sorts all the transactions that make up a cost at a certain date by postive and negative before calculating the average. Hence 12.50.

You can demonstrate this for a single day quite easily if you have an opening balance, then issue/invoice a few times and then process a positive adjustment at a different cost to the opening cost. When the adjust cost is run it recalculates the average for the day by adding the positive adj to the opening balance and then applies that calculated average to all the days issues/invoices. Every one will have an adjustment. This can be very annoying if you only post the days production in the evening as you can have thousands of adjustments.