GL/Stock Status - Balancing question

[leishad]

Please note that I began my adventure with thread639-819736 and am just narrowing the field with my current question.

We use line item cost in order entry and if i understand correctly that means that the inventory is relieved using this cost. But, what I don't get is if the stock status report reflects the value of inventory based on the average cost on the day that the report is run won't we always be out of balance when using an average cost system? My example:

PO receive 5 widgets for $20 ea
OE sell 1 widget at $20 cost
PO receive 5 widgets for $21 ea
OE sell 1 widget at $20.50 cost

Now I run a GL trial balance and stock status report
Won't I see the GL +100, +105, -20, -20.50 = 164.50 but the
stock status will show qty 8 @ 20.50 = 164.00

 

[dgillz]

PO receive 5 widgets for $20 ea
OE sell 1 widget at $20 cost
PO receive 5 widgets for $21 ea
OE sell 1 widget at $20.50 cost

At this point, the average cost will not be 20.50 as you indicated. It will be 20.555556

($80 + $121)/9 Qty on hand

On the rest of you post, you are correct that if you are using L in OE setup, the average cost may change between the time of order entry and the time the item is invoiced, which will cause your Inventoy Valuation report to be out of balance with your G/L.


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[MacolaHelp]

Have you considered going to actual cost for OE posting so it picks up the average at the time of posting OE issues? Then you don't have an oob condition unless someone has changed QOH or cost in iminvloc. You could also have a problem if items are received at the wrong cost & later cost adjusted to fix IM stock status. If you don't also update the line item cost on the order, you'll have a variance. Going to actual will also fix this condition. And, did you say if you are using non-stocked items? If you don't stock it, you don't have an average cost, only a last cost during PO receipt. If you do an inventory transaction to receipt a nonstocked item, none of the cost fields are updated.