I noticed that the margin percent calculations in Sage didn't seem quite right so to test things I created a brand new average cost item. I gave the item a Standard Cost of $100. I then received in 100 units @ $100 each and then another receipt for 100 more units @ $200 each. I know have an item with a Standard Cost of $100, an average cost of $150 per unit and a last cost of $200 each. I then go into Sales Order Entry and added this to a sales order with a price of $500 per unit. Sage shows me the Unit Cost is $150 per unit, the average cost and it also shows me that the Margin % is 60% for that sales order line. This is not correct. ($500 - $150)/$500 = 70%.
It appears that Sage is actually using the last cost per unit of $200 per unit to perform the margin percent calculation as ($500-$$200) / $500 = 60% which is what Sage shows. My question is why would Sage show the Average Cost and then use the Last Cost to calculate the Margin Percent?