x
Highlighted
GLG

FIFO - Two locations to enter unit cost?

There is no explanation as to why there are two locations to enter unit cost & how to use them properly. I want FIFO to work & I'm afraid if I use the wrong unit cost box, it won't.

 

I started with 10 of an item at $.70/each. I want to add 10 more at $.55/each. I enter the original 10 under stock received & $.70 unit cost. I click done & go back to the main "edit item" page. I can enter the cost again. When I don't & I close out to my inventory list, nothing shows in the "unit cost" column. So, I put $.70 again.

 

Now I want to enter 10 more at $.55. I do the same thing with stock received & entering $.55. When I go back to the main "edit item" page it says $.70 as the unit cost.

 

Questions:

- Is the $.70 on the main page because I still have those items in stock? And when I sell those 10 items, will it change to $.55 because I am now selling those items?

- If I want FIFO to work, should I not enter anything in unit cost on the edit item page?

- What is the point of the two boxes, how do I use them correctly, & what should I see in order to make sure it is working correctly?

Message 1 of 3
92 Views
1 Best Answer

Accepted Solutions
Highlighted
elaine_p Square

Re: FIFO - Two locations to enter unit cost?

Best Answer

Hi @GLG , happy to help.

 

Cost lots are created using the cost entered when you receive the item and will use the FIFO methodology. In the manage stock tab that opens when you click the stock field or "edit per location", unit costs are associated with a specific location. In the Item edit table, you are defining a default cost across locations. 

 

Going point by point, trying to break down each question individually: 

  1. Why is $.70 on the main create/edit item screen? Unit Cost defined on this screen will act as a default cost. It will pre-fill the cost field in the manage stock tab, or for the line item when it is added to a purchase order. You can update the default if you want to. If you update the cost in a purchase order, it will update the default cost. 
  2. If cost is set to something other than the default on a receive, which cost is used? The cost entered on the receive. One way to see the cost assigned to an inventory adjustment is to go to Items > Inventory Management > History. You can see cost in the Total Cost column, or the per item cost by clicking on the row to see the detail. 
  3. Will FIFO work when using a default cost? Yes. 
  4. How do I make sure it's working correctly? Take a look at the Inventory Management > History page. If you find you need to update a cost on a past receive, you can do that by editing the purchase order, or by editing the cost in the Inventory Management > History line item detail. 

Let me know if you have additional questions.

View Best Answer >

Message 2 of 3
34 Views
2 REPLIES 2
Highlighted
elaine_p Square

Re: FIFO - Two locations to enter unit cost?

Best Answer

Hi @GLG , happy to help.

 

Cost lots are created using the cost entered when you receive the item and will use the FIFO methodology. In the manage stock tab that opens when you click the stock field or "edit per location", unit costs are associated with a specific location. In the Item edit table, you are defining a default cost across locations. 

 

Going point by point, trying to break down each question individually: 

  1. Why is $.70 on the main create/edit item screen? Unit Cost defined on this screen will act as a default cost. It will pre-fill the cost field in the manage stock tab, or for the line item when it is added to a purchase order. You can update the default if you want to. If you update the cost in a purchase order, it will update the default cost. 
  2. If cost is set to something other than the default on a receive, which cost is used? The cost entered on the receive. One way to see the cost assigned to an inventory adjustment is to go to Items > Inventory Management > History. You can see cost in the Total Cost column, or the per item cost by clicking on the row to see the detail. 
  3. Will FIFO work when using a default cost? Yes. 
  4. How do I make sure it's working correctly? Take a look at the Inventory Management > History page. If you find you need to update a cost on a past receive, you can do that by editing the purchase order, or by editing the cost in the Inventory Management > History line item detail. 

Let me know if you have additional questions.

View Best Answer >

Message 2 of 3
35 Views
Highlighted
Admin

Re: FIFO - Two locations to enter unit cost?

Thanks for stepping in @elaine_p 🙌 

 

@GLG - I hope this helps! 

Message 3 of 3
17 Views