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Rodney_165
Level 1

How to fix the inventory item cost

Hello I often buy different items at different prices and for valuation purposes quick books uses the Weighted averages to get average cost which is then used in the computation of COGS. How can i fix the cost so that the original cost does not change when a new item comes in at another cost?

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Best answer January 28, 2020

Accepted Solutions
Chris_H
QuickBooks Team

How to fix the inventory item cost

Hi there Rodney_165,

Welcome back to the community.

QuickBooks desktop by default will always work out the the stock valuation of an item based on the weighted average of all of the different costs at which items were purchased,  and then posts this average to the Cost of goods sold when said item is used in sales transactions.

There is no way to change this I am afraid. The only alternative would be to convert your data to QuickBooks online which uses a F.I.F.O (First in first out) stock system. https://quickbooks.intuit.com/community/Help-Articles/What-is-FIFO-and-how-is-it-used-for-inventory-...

 

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3 REPLIES 3
Chris_H
QuickBooks Team

How to fix the inventory item cost

Hi there Rodney_165,

Welcome back to the community.

QuickBooks desktop by default will always work out the the stock valuation of an item based on the weighted average of all of the different costs at which items were purchased,  and then posts this average to the Cost of goods sold when said item is used in sales transactions.

There is no way to change this I am afraid. The only alternative would be to convert your data to QuickBooks online which uses a F.I.F.O (First in first out) stock system. https://quickbooks.intuit.com/community/Help-Articles/What-is-FIFO-and-how-is-it-used-for-inventory-...

 

View solution in original post

yenni
Level 1

How to fix the inventory item cost

Hi, I am using Quickbooks Online for our accounting software and as you said Quickbooks Online is used FIFO method. However, when I wanted to check the inventory report through Inventory Valuation Report, why the items are still being revalued? And how to adjust the revalued amount to different amount?
Please see attached file for your reference.

Maybelle_S
QuickBooks Team

How to fix the inventory item cost

Hello there, @yenni.

 

The Inventory Valuation Summary shows the quantity on hand, value, and average cost for each product. Inventory Valuation Detail report on the other hand gives you the transactions for each inventory item, and how they affect quantity on hand, value, and cost.

 

Let's ensure that you used the same report period for both reports to show the same amounts. Then, look into the quantity on hand and asset value if they're correctly posted. You'll want to open a new tab and pull up one report from there so you'll just have to switch tabs.

 

Additionally, you can edit the initial cost on the starting value hyperlink. Let me guide you through the steps.

 

1. Go to the Gear icon.

2. Select Product and Services.

3. Choose the item, then click Edit.

4. Under the Quantity on hand section, click Starting value.

5. Select Got it!

6. Enter the amount under the Initial cost field.

7. Click Save and close.

 

For more details on handling your inventory, you can check out this article: Use reports to see your sales and stock status.

 

Let me know if you have other questions. Take care!

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