1

Use Actual Landed Cost

This feature setting in the Setup Company Data document invokes the Average Costing behaviour in LILAC except with respect to any “Serial Numbered” or “Batch Numbered” products, in which case “actual” means actual. Standard Cost is used unless company data is set to Use Actual Landed Cost.

2

FIFO Product Movement

It is assumed that product moves through the warehouse on a “First-in-first-out” basis in so far as there may be any variation in value with respect product age.

3

Purchase Invoice Time

The processing of purchase invoices re-computes the average cost as follows A1 := (A0 * S + Q * P)/(S+Q), where A0 is the previous Average, A1 in the new average, S is the previous stock quantity, P is the invoice unit cost, and Q is the invoice quantity.

4

Sales Invoice Time

The average does not change. It is used to compute COST OF SALES and INVENTORY postings.

5

Check Balance

There are two ways that Average Cost for each product may be (re)-calculated. Clicking the “Check Stock” button in the Stock Account document for individual products, and running he “Live Check Balance” Report for across the board recalculation.

6

Stock Take in past period

The Average Cost may be reset to suit a past period by running the Live Check Balance report in the past period to permit stock take processing using the appropriate averages. It is important that no future period transaction are processed at that time until the Live Check Balance is re-run the latest accounting period.

7

FOREX Processing

All postings the INVENTORY accounts are conducted in $AUD.

The Average Cost cannot be computed when the Stock level is zero as the calculation would involve a division by zero which is arithmetically undefined.