How does the Balanced average price inventory value calculation method work?
The balanced average price method takes expenses and revenues into account when calculating inventory values.
Therefore, the balanced average price inventory value calculation method and the Inventory may have a negative value setting can be applied at the same time.
Example 1:
You buy: 10 pcs with the price of 250 USD/pcs
You buy: 5 pcs with the price of 220 USD/pcs
Calculation:
Average price=(10*250+5*220)/15=240 USD/pcs
Inventory value =15*240=3 600 USD
You sell: 5 pcs with the price of 350 USD/pcs
Calculation:
Average price=(10*250+5*220)/15=240 USD/pcs
Inventory value =10*240=2 400 USD
Sales margin = (Average price:240 USD/pcs): 5*350-5*240=550 USD
You buy: 2 pcs with the price of 270 USD/pcs
Calculation:
Average price=(10*240+2*270)/12= 245 USD/pcs
Inventory value: 12*245=2Â 940 USD
Next step of inventory management:
 |
Inventory value calculation methods » |
