Weighted Average Cost

The Weighted Average Cost (WAC) method calculates the average cost of inventory by considering the varying costs of items over time. This approach provides a more accurate representation of both inventory value and the cost of goods sold (COGS), making it essential for effective inventory management and financial reporting.

This report is generated from the purchase order and will only be available if the setting to calculate the weighted average cost is enabled. By selecting YES for this option, the system will automatically compute and display the relevant WAC data.

• Item: Identifies the specific product for which the average cost is being calculated.

• Beginning Count: Represents the initial quantity of the item in inventory at the start of the reporting period.

• Beginning Total Cost: Shows the total cost of the inventory for the item at the beginning of the reporting period, providing a baseline for calculations.

• Movement Count: Indicates the quantity of the item that has been added from the PO.

• Moving Total Cost: Reflects the cumulative cost associated with the items that have moved into inventory during the reporting period.

• Moving Weighted Average: Provides the updated average cost of the item after accounting for inventory movements, allowing for real-time insights into pricing.

• Module Detail: Captures the specific module or system functionality that triggers the WAC calculation, offering transparency regarding the processes involved.

To enhance usability, users can utilize headers to filter the displayed data. This feature allows for tailored analysis, making it easier to interpret and focus on specific items or periods.