Weighted Average Cost (WAV)

The average cost calculated on receipts by taking the existing quantity in the inventory, that is, unissued stock, multiplied by the existing weighted average cost from the item record. The incoming quantity is then multiplied by its actual unit cost. These two values are totalled. The existing quantity balance is then taken plus the incoming quantity. The total value is then divided by the total quantity.

That is:

[ (QTY1 x COST1) + (QTY2 x COST2) ] / (QTY1 + QTY2)

where

QTY1 = existing quantity currently in inventory, that is, unissued stock

COST1 = existing Weighted Average Cost from the item record

QTY2 = incoming quantity

COST2 = incoming actual unit cost

Uwaga: In order to avoid negative average cost problems, if the inventory quantity used to calculate WAV is negative, WAV is set to the same value as Latest Actual Cost which is set as normal.