There was a Purchase Receipt (increase) for thirty at a unit cost of 10.00 and a total cost of 300.00. Dateįor October 8, the opening balance of inventory was fifteen at the average cost carried over from the previous day. This cost of 13.33 was applied to the Sales Shipment (decrease) and was the average cost balance at the end of the day. The average cost of the receipts was 13.33 (400.00 / 30). The positive inventory adjustment for ten and the purchase receipt (increase) gives a total quantity of 30 and a total cost of 400.00. Dateįor October 7, there was zero on hand at the beginning of the day. If there are any inventory increases that were fixed applied to inventory decreases in the period, the program forwards this average cost to these entries as well. The program then applies this average cost to the inventory decreases for the item (or item, location, and variant) with posting dates in the average cost period. Divides by the total inventory quantity as of the end of the average cost period, not including those inventory decreases that are being valued.These might include purchase returns and negative outputs. Subtracts the sum of the costs of outbound transactions that were fixed applied to receipts in the average cost period.These include purchases, positive adjustments, outputs, and revaluations. Adds the sum of the receipt costs that were posted during the average cost period.Determines the cost of the item at the beginning of the average cost period.The explanation of how to calculate Average Cost was explained as follows: The explanation below comes from a white paper entitled, “Dynamics NAV 5.0 Inventory Costing.” We often get questions on how Dynamics NAV calculates Average Cost and have created a simple example below to illustrate.

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