Average cost price

The inventory value of your products is calculated as the product of current stock multiplied by the average cost price. This is a standardized method for determining your inventory value when purchase prices potentially change.

The average cost price is the unit price of a product in your inventory. This value changes exclusively when the stock is increased. Here, the current net purchase price is selected and adjusted proportionally.

Example:

1. The opening stock of a product is 10.00 and the net purchase price is 12.50. The average cost price is 12.50 and the inventory value is accordingly 125.00.
2. Two months later, the stock is increased by 2 through a goods receipt at an updated net purchase price of 15.00. The average cost price is now calculated as follows:

     Previous inventory value + number of new products * current net purchase price
     -------------------------------------------------------------------------------
                              new stock 
   = (125.00 + 2 * 15.00) / 12 
   = 155 / 12 
   = 12.92

   The new inventory value is 155.00.

3. By selling one product, the stock decreases to 14. The average cost price remains the same. The inventory value is: 14 * 12.92 = 180.88

The purpose of the average cost price is to reflect a realistic - tax-relevant - value of the inventory. Through further goods receipts, the average cost price always approaches the current net purchase price.