Clarification on how product average cost is calculated. The system calculates product costs using the average cost method, which includes:
- Cost in purchase invoices
- Cost in opening balances
- Cost in inventory counts
- Cost in the location transferred from during inventory transfers
Practical Example:
| Transaction | Number of Units | Cost per Unit | Total Cost |
|---|---|---|---|
| Opening Balance | 10 units | 20 SAR | 200 SAR |
| Purchase Transaction | 30 units | 15 SAR | 450 SAR |
| Total | 40 units | 650 SAR | |
| Average Unit Cost | 16.25 SAR |
Calculation Method:
- Total cost of all units:
(10×20)+(30×15)=650 SAR. - Average unit cost:
650÷40=16.25 SAR.
How to View Product Average Cost
Qoyod offers you multiple ways to view the average cost of a product by location. You can choose the method that best suits your needs.
Method 1: From the Products and Costs Page
This method is suitable for a quick view of a specific product’s cost.
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From the sidebar menu, go to the Products and Costs page.
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A list of products will appear.
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Click the View option next to the desired product.
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Product details will appear, with the average product cost clearly shown for each location.
This method helps you quickly determine product cost without accessing reports.
Method 2: Through Reports
This method is suitable when you want to analyze costs and profit margins in detail.
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Go to Reports from the sidebar menu.
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Select the Product Cost and Profit Margins Report.
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The report will display all products, and you can customize the view using the following filters:
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Product Type
(Product, Bundle, Raw Material, Expense) -
Product Category (Item Classification)
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Product Name
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Location
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After applying the filters, the report will display the desired product with the following data:
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Product Code
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Product Type
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Product Name
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Product Category
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Location
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Available Quantity
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Purchase Price
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Net Purchase Price
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Average Unit Cost
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Selling Price
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Net Selling Price
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Profit Margin from Average Unit Cost
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Profit Margin Percentage (%) from Average Unit Cost
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This report is useful for monitoring product profitability and making more accurate pricing decisions based on actual average cost.
Important Notes
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If there is no quantity available for the product in any location, the average cost will not be displayed because there is no quantity to calculate the cost against.
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Average cost is not displayed directly in sales invoices or purchase invoices; it can only be viewed through the Products and Costs page or reports.
Additional Notes:
- The system uses only the average cost method.
- Other methods such as FIFO (First In First Out) and LIFO (Last In First Out) are not currently available.
- During inventory transfers, the average cost in the destination location is affected by the average cost value of the product in the source location.
