Moving Average Cost
it is assumed that the cost of inventory is based on the average cost of the goods available for sale.The average cost is computed by dividing the total cost of goods available for sale by the total units available for sale. This formula will give a weighted-average unit cost that is applied to the units in the ending inventory.
You may refer to the formula :
Moving Average = (((Current Balance * Current MA Cost) + (New Quantity * New Price)) / (Current Balance + New Quantity))
- MA in Wavelet Enterprise Management Portal:
- MA cost will be adjusted when transactions such as Direct receiving stock (GRN) and Purchase return take place .
- In order to reset MA cost in Wavelet EMP system. User has to follow the given directory :
- Inventory > Reset MA > Reset MA .
- User should be able to see the following interface :
- The user will need to enter the item code. Once the item coded entered, the EMP will show the MA table for that particular items and also previous MA setting made.
- The user will need to choose either an option of the 2 available options: New MA Cost per Unit OR Total Adjustment
- the first option: "New MA Cost Per Unit": will only adjust the cost price for each item, and based on that the total MA will be calculated automatically.
- The second option: "Total Adjustment": will adjust the total items average cost, and based on that the cost price for each item will be generated.
- Once done , click "RESET MA PRICE NOW" Button. and MA table will be shown to describe the changes made.