How Is Cost Calculated

Example of Rolling Average Cost Calculation:

 

June 1 – Beginning Inventory:   10 Units at $10.00 each (wholesale cost)  =  $100.00

June 4 – Purchases of Product: 12 Units at $11.00 each (wholesale cost)  =   $132.00

June 6 – Purchases of Product:  15 Units at $10.50 each (wholesale cost) =   $157.50

                                            Total:   37 Units   /    $389.50

                                             Rolling average cost = $10.53

 

For current/new cost calculations, the following formula is performed each time an order is received via the OrderDog system.  This only formula only applies to customers who have Inventory Tracking set to YES on their Point of Sale:

     ((On_Hand * CurrentCost) + (ReceivedQty * ReceivedCost)) / (Current_on_Hand + ReceivedQty)

For customers who have Inventory Tracking set to NO on their Point of Sale, current/new cost calculations are performed as:

                                (0 + ReceivedQty * ReceivedCost)/ (0 + ReceivedQty)