Adjust Average Cost action

When you select Average Cost Adjustment from the Select Action menu, an average cost adjustment (AVGCSTADJ) transaction is created. The Control GL Account field is used as the debit account and the Cost Adjustment GL Account field is used as the credit account.

If you issue items at average cost and want any price increases reflected immediately in the issue cost, you might want to adjust the average cost value.

To adjust the average cost of an item, complete the following steps:

  1. From the List tab of the Inventory application, display the item whose average cost you want to adjust.
  2. Click the Inventory tab and from Select Action menu, select Inventory Adjustments > Average Cost.
  3. Enter the average cost value in the Average Cost field. If you are adjusting the cost of a condition-enabled item, you can adjust the costs for all condition levels. You can enter a new value for the average cost directly, or you can specify a percentage increase or decrease by which to adjust the average cost in the Cost % field. If you enter a figure in the Cost % field, the New Average Cost field is updated accordingly.
  4. Update the GL account information in the Control Account and Cost Adjustment Account fields. Adjusting the current balance figure affects these values.
  5. Click OK. The Average Cost field on the Inventory tab displays the new value. The average cost adjustment is recorded in the inventory transactions table.

The INVCOST table is the primary source of the default account code for the inventory control account.

The system date and time are used to determine the financial period for the transaction.

When you click OK on the Average Cost Adjustment window, an AVGCSTADJ transaction is written to the INVTRANS table.

Example

Adjust the average cost of a bearing from $22.00 to $25.00. The current balance of the item is 2

Table 1. Source of GL account for average cost adjustment
Source GL account Debit Credit Source of GL account
Inventory control account ($25.00-$22.00)x 2 = $6.00 ($25.00-$22.00)x 2 = $6.00 Inventory cost adjustment account

If you capitalize the item, the average cost is zero, and you cannot perform the transaction.

Inventory transactions for Type=AVGCSTADJ

When you select Adjust Average Cost from the Select Action menu, an AVGCSTADJ transaction is written to the inventory transactions (INVTRANS) table.

Displayed fields

GL Debit Account (GLDEBITACCT) Defaults to GL Control Account field (hidden) in the Inventory application Defaults to Inventory Control Account field on the Inventory-Related Accounts window in the Chart of Accounts application.

GL Debit Account (GLCREDITACCT) Defaults to GL Cost Adjustment Account field (hidden) in the Inventory application Defaults to Inventory Cost Adjustment Account field on the Inventory-Related Accounts window in the Chart of Accounts application.

Database fields

INVTRANS.GLDEBITACCT Defaults to INVCOST.CONTROLACC Defaults to LOCATIONS.CONTROLACC

INVTRANS.GLCREDITACCT Defaults to INVCOST.INVCOSTADJACC Defaults to LOCATIONS.INVCOSTADJACC