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Weighted Average

This page describes the Weighted Average setting in the Stock module.

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The average purchase price per unit of each Item (i.e. the Weighted Average Cost Price of each Item) is stored in two places, as follows:

  • The overall Weighted Average value of each Item is stored in the Weighted Average field on the 'Costs' card of the Item record.

  • Separate Weighted Average figures for each Item in each Location are stored in the Weighted Average setting in the Stock module. This setting is described on this page.
The Weighted Average setting will contain separate records for each Item/Location combination. Usually, you will not need to create records in this setting yourself because they will be created automatically when you receive Items into stock (io.e. when you mark Goods Receipts as OK and save). If a Weighted Average record already exists for a particular Item/Location combination, its average purchase price will be recalculated, using the following formula:

WA = ((Qty in stock x Current WA) + (Qty on GR x Unit Pr. on GR))
(Qty in stock + Qty on GR)

(where GR refers to the new Goods Receipt).

An Item's Weighted Average cost price will include any extra costs such as carriage and customs duties.

If you are not using Locations (i.e. you leave the Location field in each Goods Receipt empty and if you have not specified a Main Location in the Stock Settings setting), the Weighted Average setting will not be updated when you receive Items into stock (i.e. the Weighted Average setting will remain empty).

The Weighted Average setting will also be updated from Productions, Production Operations and Stock Movements. In addition, it will be updated from Credit Notes (if Update Stock is ticked) and from Returned Goods if you are using the Update Weighted Average from Returned Goods and Credit Notes option in the Cost Accounting setting in the Stock module, and from Returned Goods to Suppliers if you are using the Update Weighted Average from Returned Goods to Supplier option in the same setting.

If you are using the Weighted Average Cost Model together with the Weighted Average per Location option in the Cost Accounting setting. The Weighted Average figures in this setting will be used to calculate the stock valuation in the Stock List report and to calculate the value of outward stock transactions (including cost of sales postings).

As the Weighted Average setting contains calculated figures, you should not change the records yourself. Doing so will introduce inaccuracies into the Stock List report and cost of sales postings. If you need to check a Weighted Average figure, first ensure you are in the Stock module using the [Switch Module] button in the Navigation Centre. Then, if you are using Windows or Mac OS X, click the [Settings] button, also in the Navigation Centre and double-click 'Weighted Average' in the resulting 'Settings' list. If you are using iOS or Android, select 'Settings' from the Tools menu (with 'wrench' icon) and tap 'Weighted Average' in the 'Settings' list. to open the 'Weighted Average: Browse' window. This lists the existing Weighted Average records. Double-click or tap a record in the list to open it for checking.

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Settings in the Stock module: