Average Cost evol./movement using Order Price rather than FIFO

Question

Hi, 
 We've noticed a few funny jumps in our average costs. Please see the attached example.

Is this being calculated correctly? 
 
 The product is set the FIFO costing valuation method so not sure why it's using order price here and then decreasing so much. 
 
 Thanks, 
 
 Matthew

Julien Patureau · Answer

Hi Matthew Lingard 
 The function average cost evol/movvement is to view the evolution of the average cost which is based on the order price. The calculation displayed in this screen doesn't care for FIFO cost at all. 
 If you manage FIFO costing then I recommend you to use the FIFO cost mouvement inquiry (CONSSMF). 
 Note: when the stock quantity goes by zero, it's totally normal that the AVC cost is jumping. Indeed, in your example on the 23/05 you have no starting stock so the average cost is only based on the new order price from your production tracking. 
 Note2: big variation on the AVC can be explained by transaction enry error: for instance consuming 10 times more a component or when having a large % of scrap upon a production process.

Sage X3

Average Cost evol./movement using Order Price rather than FIFO

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