Point of sale - average cost

@bgolfer 

Average cost is calculated as follows:

On July 1, you received 100 golf balls @ $2.75/ea = $275

On Aug 1, you received 100 golf balls @ $3.00/ea = $300

Average cost = ($275 + $300) / 200 = $2.875

Average cost is used when running an inventory valuation report and when QBPOS records COGS whenever you sell a golf ball.  It's my understanding that you won't have an average cost if you don't receive inventory items using a receiving voucher. 

@Rainflurry thank you.

Is there another way to update average cost if we haven't used any receiving vouchers for an item? Just an adjustment when we set up QB POS system. 

Hi there, @bgolfer. 

I want to shed some light on how QuickBooks handles average costs in the POS system. 

When you sell inventory, QuickBooks uses the weighted average cost to determine the value of your inventory and the amount debited to COGS. The average cost is the total cost of all inventory items divided by the number of items.

You can check out this article to see some examples how average cost is being calculated: Understand inventory assets and cost of goods sold tracking. 

To get more idea of how your average cost is calculated, you can also run the Inventory Valuation Summary report. It explains how QuickBooks calculated the item's average cost. 

Here's how:

1. Go to the Reports menu, then select Inventory.
2. Select Inventory Valuation Summary, then set the dates to All.
3. Double-click the item in question.

Let me know if you have additional questions about handling average cost. I'll be here to explain some more. 

@bgolfer 

I believe you can just enter an amount in the Avg. cost field and click save, no?  That will generate an adjustment memo that will update the inventory valuation.  I'm going by memory here, so...  Hopefully, someone smarter than me can chime in. 

@Rainflurry I think this will work! I'll let you know if I have more questions. Appreciate the help!