Page History: Coil Finder Cost vs. Inventory On Hand Moving Average Cost
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Page Revision: Thu, 16 Feb 2012 12:41
Explanation of Variance in Value
The total cost/value on the Inventory On Hand report and Coil Finder report will most likely NEVER match when your inventory costing method is Moving Average.
The reason is that the Inventory On Hand report displays the Moving Average Cost of the item and the Coil Finder displays the actual cost of each coil in stock.
Moving Average Cost is changed each time inventory is added. It is never changed when inventory is relieved.
For example, if you have zero inventory of a certain type of coil and then you receive 1000 FT at $0.52/FT, your new average cost will be $0.52/FT. If you receive 9000 more FT at $0.42/FT, your new average cost will be $0.43/FT because you now have 10,000 FT at a total cost of $4300.
If you use all 9000 FT of your 0.42/FT coil on a new building, your moving average cost is still $0.43/FT because the cost does not change when inventory is relieved.
The Coil Finder, however, is always going to report actual costs of each coil in stock.
In the example above, Coil Finder will report that you have one coil that is 1000 FT at a cost of $0.52/FT. This will result in a total value of $520 whereas the Inventory On Hand report will show a total value of $430.
Another example can be downloaded here.
