Average Costing Setup

Follow these steps to implement Average costing in the system:

Select the Post to Journal check box on the General Parameters form to have all transactions which affect inventory post to the G/L Inventory Distribution Journal. Clear the check box to suppress posting to the G/L those transactions which may affect inventory.
Set the Cost Method field on the Items form , General tab to Average for all items. (Ideally, you will set this field at the time the items are added to the Items form).
Set the Cost Type field on the Items form , General tab to Actual. The cost type defaults from the Cost Type field on the General Parameters form when adding new items.
Enter the initial cost of each item into the Unit Cost field on the Item Costs form.
You can maintain cost details for both unit cost and Current unit cost entities. When the beginning inventory balance is entered through the stock adjust transaction, the quantity entered is valued at the cost entered. If an item has no beginning inventory balance, zero may be left in the Unit Cost field for the system to update as the item is received into stock.
If you have instructed the system to post inventory transactions to the G/L by selecting the Post to Journal check box on the General Parameters form, you must also set up the G/L account numbers which the system uses for this interface.
Specify these account numbers in the the associated codes and parameters for costing purposes:
- Product Codes - WIP Tab:
  Material
  
  Labor
  
  Fovhd
  
  Vovhd
  
  Outside
- Product Codes - Misc Tab:
  Only one account is needed for:
  
  Inventory Adjustment
- Product Codes - Applied Overhead Tab:
  Only one account is needed for each of the following:
  
  Matl Fovhd Applied
  
  Matl Vovhd Applied
  
  Note: The Matl Fovhd Applied and the Matl Vovhd Applied accounts are required only when overhead is based on job material issues.
- Departments:
  Fixed Ovhd Applied Acct
  
  Var Ovhd Applied Acct
  
  Direct Labor Applied Acct
  
  Work Centers - Costing Tab
  
  Fix Mach Ovhd Applied Acct
  
  Var Mach Ovhd Applied Acct
- Distribution Accounts - Inventory Tab:
  Inventory
  
  Inventory Labor
  
  Inventory Fovhd
  
  Inventory Vovhd
  
  Inventory Outside
- Distribution Accounts - Sales/COGS Tab:
  COGS Matl
  
  COGS Labor
  
  COGS Fovhd
  
  COGS Vovhd
  
  COGS Outside
- Distribution Accounts - In-Transit Tab:
  In-Transit Material
  
  In-Transit Labor
  
  In-Transit Fovhd
  
  In-Transit Vovhead
  
  In-Transit Outside