Cost Calculation Quantity

The Cost Calculation Quantity or CCQ is used to calculate a weighted cost by quantity for sales products to provide an accurate average cost for the product.
This is required because costs on new stock purchases usually vary over time.
When inventory is received in the warehouse, the current quantity on hand at the old cost is noted (CCQ), and then when the invoice is entered the quantity at the new cost, is used to calculate a new average cost.
The CCQ does not apply to rentals, as the cost can be tracked on multiple Fixed Average Tags for rental equipment.

The average cost of inventory can be changed several ways, including transfer rental to sale, operator manually changes cost, warehouse receiving, or A/P invoicing.
It can be accessed for a specific product from Sales Inventory by clicking on the icon beside the Avg Cost Each field.

The average weighted cost of each sales item is automatically recalculated on new purchases based on the following Cost Calculation formula:

  KEY: CCQ     = Cost Calculation Quantity
       Old CCQ = Existing Quantity on hand prior to the new purchase
       New CCQ = New Purchase Quantity


         (Old Cost * Old CCQ)   +  (New Cost * New CCQ)
                        (Old CCQ  + New CCQ)


         = ($1.50 Old Cost * 10 On Hand Qty) + ($2.00 New Cost * 4 New Qty)
                        (10 On Hand Qty  +  4 New Purchase Qty)

         = (15 + 8)
              14

         = $1.64

Note: The OLD CCQ will become negative if more inventory was sold than was on hand. (This causes the over-shipped report to be triggered when A/P invoices are posted in Post A/P Invoices.)
When the OLD CCQ is negative, the new cost automatically replaces the old cost, rather than doing the average cost calculation.