Cost Price Calculation
We are using Baan IV. We set the Method of Calculating Average Purchase Price as Current Inventory.
We have data from the beginning of one purchased item as attached file.
The system computed the month-end average prices differ to the manual calculation.
Could you please help to take a look and advise the differences between them?
Thanks a lot!
As per my knowledge, BaaN uses following formula to calculate the moving average purchase prices:
MAPP1 = (Quantity 1 x Purchase Price 1 + Quantity 2 x Purchase price 2) / (Quantity 1 + Quantity2 )
MAPP2 = (MAPP1 x (Quantity 1 + Quanitity 2) + (Purchase Price 3 x Quantity 3) / (Q1 + Q2 + Q3)
This goes on with subsequent purchase receipts and if you calculate using the above formula the MAPP at the end of Oct 15 is 2.4638 whereas the as per BaaN it is 2.45398. The difference could be due to rouding factors, which you may have to check.
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