Product Average Costing Calculations
This video shows average costing calculations using our software. In order to keep products costs easier for you, Finale keeps up with your purchases and automatically calculates the average product cost of each product. For example, if you purchase a widget for $10, the average cost of the widget would be $10. If one week later, you bought the same widget for $12, the average of the widget would be $11 (or [12+10] / 2).
Whenever you make purchases, Finale will dynamically calculate and update your average cost. See the video below for instruction:
Average Costing Calculations
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Hi, this is Chinh of Finale Inventory. In this video, I’m gonna show you how our average product cost feature works. So in this demo let’s open up Finale, and in this demo, I’ve created a new product called “Purple Polo Shirt”, and right now we don’t have any in stock. So let’s create a purchase order to receive the initial shipment in. So I create a new purchase. Let’s say I’m gonna buy from company ABC here, type in what I’m gonna buy. And let’s say in this demo I’m gonna buy 10 polo shirts and I can right now purchase it for $10.50. So I hit “mark purchase committed” to communicate it’s a firm order and let’s say, in this demo to make it fast, I’m receiving…instantly receiving the shipment.
So I hit “update shipment to match order”, and I receive the shipment. So now, basically, we see, if I go back to my view stock, I should have 10 purple shirts and the average cost, because this is the only shipment we have, is $10.50. But let’s create another shipment from a PO and kinda see how the prices change. So let’s say…and this we’re gonna buy from a different vendor, XYZ and let’s just say that, you know, XYZ charges a different price, and they charge actually $11.00 instead of $10.50. I’m still buying 10 shirts, so I hit “mark purchase committed.”
Let’s go to my shipment and receive it in. So I hit “update shipment to match order” to say I’m receiving all 10 in, and receive the shipment in. So if I go back to my “view stock,” I have 20 total shirts here. Let’s see how my average cost has changed and the reason why is because we had…we bought 10 shirts for $10.50 in the first shipment. In the second shipment it was 10 shirts for $11.00, so the average cost now for this purple polo shirt is $10.75. And, you know, as you continue to add new shipments from PO’s, Finale will determine the product average costing calculations.