We're new to QB Enterprise and I had a question on inventory valuation when using lot tracking.
Suppose we purchase:
Lot A = 5 units purchased at $1.00
Lot B purchased later with volume discount:
Lot B = 20 units purchased at $.50
We now have a significant percentage of our inventory that should be valued at $.50 and a smaller percentage that should be valued at $1.00. My question is, behind the scenes, will QB average that value over all 25 units, or will it keep the value per lot?
Congratulations on your new QuickBooks Desktop. I'd be happy to share what I know about inventory in QuickBooks.
The Average Cost valuation method is what QuickBooks uses to compute the value of your inventory unless you choose FIFO in the Advanced Inventory add-on to Enterprise Solutions. So ideally QuickBooks will keep the value per lot.
You can pull up the Inventory Valuation Detail Report to see all inventory items and displays the transactions behind the numbers. The report also tells you:
How each transaction increased or decreased the quantity