Edward Gutkowski, Chief Architect - RapidReconciler
Average cost items, unlike their standard cost counterparts, require some extra steps when analyzing cardex integrity. With standard cost items, variances can always be determined at the location/lot level.
This is because cost changes create ‘IB’ transactions based on the quantity in the particular location or lot. It is a simple matter of exporting the cardex transactions to Excel, and comparing the summarized totals to the balances on the top of the screen (circled below).
Average cost items, on the other hand, do not create the ‘IB’ transactions. Instead, the weighted average is recalculated for each qualifying transaction. In order to maintain cardex integrity the sum of the transactions must still add up to the balances! There is no exception to this rule. So how do you do the analysis? Here is where the extra step comes in. You must first determine the cost level of the item from the item master, and perform the analysis accordingly. There are 3 cost levels:
1- Costs maintained at the item level
2- Costs maintained at the item branch level
3- Costs maintained at the location/lot level
You would need to set the filters on the item ledger screen according to the cost level for the average cost item. The picture above would apply to level 1, where only the item number is specified. If the item is level 2, a specific branch must be entered and for level 3 a location/lot. Cardex integrity is an important factor in maintaining the health of you inventory system. It is important to know how to validate the data, especially when using weighted averages!
Happy reconciling!