Dynamics 365 Business Central: Item Costing, part 10

Dynamics 365 Business Central: Item Costing, part 10

Hey everyone!

We have a Bootcamp, so you can actually go in a classroom setting and learn about NAV, actually Business Central, and everything that is new in Business Central.

Also the generic areas like accounting, purchasing, inventory, warehouse. Stuff like that.

A full run-through.

So if you like classroom settings, you like learning like that, you're tired of sitting at home and watching YouTube, then sign up!

Tomorrow (May 10^th, 2019) is the end of this special early bird special, so just click on the link that's somewhere around here. Check it out!

In this video today, we're going to keep going on average.

Again, remember we were in the average coffee mug. I'm just going to highlight now, when we are actually selling the remaining quantity.

So we buy, if you remember, we buy 100 and then another 100, and then we sell 50. We're going to sell them in increments of 50 out. Just to see how the average cost is replenishing down.

It's a little bit tricky with average, so the average is taking the average of all inbound transactions, whether they have remaining or not. It’s a concept that's kind of hard to understand. 

Let's say for example, if you add a transaction, there's a purchase here, purchase here. And let's say this is 4/4, the date. and also are 4/4.

This all happens afterwards, then these are sales. 50, 50, 50, 50.

Let's say if I then post something like 4/3, 100. So we get a transaction in before. Does that change the cost of these?

That might be something we explore even, in further videos.

Take a look at what we have now

Let's talk a little bit more about average. I have here the average coffee mug, and since average is actually a widely used thing, or costing, I think it makes sense to dive in a little bit closer.

If I go into the unit cost here, I can see that I have bought at $10, 100. Then I bought at $11, 100. Then I sold 50, and they were sold out at 525, basically right here. It's $10.25, if I’m not mistaken.

What we want to do now is sell it again. If we have basically 100, or 50 left of these 100, which were evaluated on a 1,000. And we have 100 left of the 1100 ones. So the ones are $11 each.

Then we technically have a different unit cost now. If I sell another 50, should I get a 525 here? 

Let's take a look at that. 

I'm going to go in sales order and sell another 50.

Let's get the Adatum corporation, average coffee mug, main, sell fifty, so it always brings up 1050. But that's fine. We know how that works.

So we go ahead and post, ship and invoice.

Let's take a look at it.

How do we go into the average coffee mug? Now there's a hundred left, and we bring up that screen. Go into navigate, history, entries, ledger entries.

Now the cost comes in at the same, 525.

Basically it's looking at the average cost altogether. If I sell, so right now we have 100 left at 1100.

It's going to be obvious that it should be coming at 50 times 11. Which is 550.

Should be coming here if it took the amount that's left. If it's averaging out all the inbound transactions, then it's going to be 525 going forward.

Let's investigate that.

We go into a sales order again and sell another 50. This is like exploration.

There we go, here. That's often the best way to learn. Average coffee mug, main, actually do recommend you do this also yourself in the system.

Again, we sell it just for $20. Go ahead and post.

So the big question is… is it going to be $11 or 550 total? Or is it going to be again 525?

I think everybody knows the answer to that.

If I go here, into navigate, history, entries, ledger entries, 525.

What is the system doing?

The system is taking the average of all inbound transactions, whether they're finished or not, doesn't matter. And it's posting that.

I mean, we could probably play around with this, in a sense where we receive something previously.

Let's say 4/3, and change the average cost, and see if the average will update.

That might be a question for the next video.