Calculate cost of goods sold based on catch weight funtionality

Running the Adjust Cost - Item Entries report initiates weight-based cost calculations for inventory using the same items that were previously adjusted by the report.

This calculation applies only to value entries created from catch weight items that use FIFO or LIFO as the costing method and when the document’sType is set to Sales Invoice.

As a result, the following fields are updated on the Value Entries page.

• Sales Cost Amount Weight (Act.): Displays the cost of invoiced items based on the catch weight.
• Adj. Sales Cost Amount by Weight: Displays the difference between the sales cost amount (weight) and cost amount (actual).
  Adj . Sales Cost Amount by Weight = Sales Cost Amount Weight (Act.) – Cost Amount (Actual)

When processing an outbound transaction, the weight unit cost of the inbound items is multiplied by the weight quantity of the outbound.

• For outbound weight greater than available weight quantity, the calculation will use the maximum available weight quantity.
• For outbound weight lesser than available weight quantity, the calculation will use the actual outbound weight quantity.

If items are returned, the cost calculations will be adjusted to match the initial weight of the outbound transaction.

Example scenario on purchase order where we received and invoiced a lot number with 10 pcs, weighing 100 kgs and Actual cost amount is 100 Euros:

• Scenario 1:

  • In a sales order, 5 pcs of this lot is sold with a weight of 52 kgs.
  • Calculation: The system will use the actual weight sold.
  • Result: The cost (Sales Cost Amount Weight (Act)) will be calculated based on the 52 kgs sold, thus will be 52 Euros (where the Cost Amount (Actual) is calculated as 50 Euros).

• Scenario 2:

  • In a sales order, the whole lot is sold (all 10 pcs), but the shipped and invoiced Weight qty is 101 kgs.
  • Calculation: The system will limit the calculation to 100 kgs, as the outbound costs cannot exceed the inbound costs.
  • Result: The cost (Sales Cost Amount Weight (Act)) will be calculated as if 100 kgs were sold and thus will be 100 Euros (Cost Amount (Actual) is also 100 Euros).

If the inbound transaction is for a transfer order, the system will check it directly against the initial inbound transaction before the transfer. The transferred weight cannot exceed the weight of the initial inbound transaction.