“Why is our cost for chocolate chips different from what we paid on the last purchase order?”
Fishbowl is set to Average Costing, so the cost is a weighted average of everything received, not the last price paid.
Short answer: Fishbowl is set to Average Costing, so the cost on chocolate chips (CR403) is a weighted average of everything received, not the last price paid. The current cost is $4.617/lb, while the last PO (PO 9, A&B Distribution, July 11) was $6.50/lb.
How the average got to $4.617:
| Event | Qty (lb) | Unit cost | Running qty | Running avg |
|---|---|---|---|---|
| Stock on hand before the POs | 47.5 | $5.00 | 47.5 | $5.000 |
| PO 2, Rocky Mountain Chocolate | 30 | $1.50 | 77.5 | $3.645 |
| PO 9, A&B Distribution | 40 | $6.50 | 117.5 | $4.617 |
Nothing since then has moved it: one pound shipped on SO 1028, and a September 4 inventory import brought in 233 lb at the existing average.
Two things worth a look:
- PO 2 at $1.50/lb is the main reason for the gap. It is far below the $5.00 and $6.50 seen elsewhere, and the part's unit was switched from Cup to Pound on July 4, so that price may be a data-entry or unit error. Without it, the average would be about $5.69.
- The September 4 import looks like a duplicate load. It added 47.5 and 69 lb to both LA and MI, which are the same quantities that were already on hand, taking stock from 116.5 to 349.5 lb (exactly triple). It didn't change the unit cost, but it means about $1,076 of inventory value has no purchase behind it.
If you want cost to track the most recent purchase price instead, that's a costing-method question (the part's standard cost is currently $0, so Standard isn't set up for it either).
What else your team could ask
“What's our inventory worth by warehouse?”
$53,860.77 at average cost, broken down across four warehouses.
Watch the answer →“what were my top product sales, and who bought them?”
Three cookies make up about 77% of your $29,544.54 in product sales, and Allen's Groceries is the main buyer of all three.
Watch the answer →“What has Allen's Groceries ordered from us, and how often?”
Five orders between July 10 and August 30, netting to $17,638.80, with no regular ordering pattern.
Watch the answer →Ask this about your own Fishbowl
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