Hi Edward

There is no such costing method as using Most Recent Cost, the closest you can get to that is to use LIFO as the costing method. You can think of LIFO as using the Most Recent Cost of those items that are still in stock, which is not necessarity the true Most Recent Cost. However, LIFO is complicated to manage and I normally avoid recommending it unless there are special circumstances, including large purchase price swings and long holding periods for inventory.

I would second Andrew's suggestion to use Standard Costing and to make the Standard Cost field equal to the Most Recent Cost (updating from time to time).

The key to all of this working is to select the setting which prevents inventory from going negative. I'm almost sure this is what is causing your problems.

Steve