Hello:

We manufacture products from a BOM where the number of components can range from 2 to 10 items that are used to create a final finished goods that we sell.

The raw goods components are moving average costed.
The finished goods are also moving average costed.

When I look at the Item Master, it has these cost fields:
(1) StdCostEa (Standard cost each)
(2) MostRecentCost
(3) QtyonHand1 (Current Quantity on hand)
(4) TotalCost1 (The current total moving average total cost)

What I noticed is that if I divide the TotalCost1 by the QtyOnHand1, the cost each is different than the Standard Cost and the Most Recent Cost. So...

For purchased components, is the Most Recent Cost what was paid the last time a new batch of purchased component was received?

Is Standard cost even used since we go by Moving Average?

For finished goods, each time we create a new batch of the goods using the BOM, does it average in the most current cost of all the BOM components, creating a new average cost for the finished goods?

Also, is there another table besides the Item Master that has the most current moving average costs?

Thanks,
Rich Locus, Marco Pharma, LLC

Hi Rich

"For purchased components, is the Most Recent Cost what was paid the last time a new batch of purchased component was received?"
Yes, although technically it might get adjusted when you enter an item on a PO, even if you haven't received the item yet (depending on how Adagio PO is set up)

"Is Standard cost even used since we go by Moving Average?"
No it is not.

"For finished goods, each time we create a new batch of the goods using the BOM, does it average in the most current cost of all the BOM components, creating a new average cost for the finished goods?"
Yes. If it were me, I would use Standard Costing for the components, so that you have some logic to the cost of the finished goods. You would then adjust the standard cost from time to time depending on how the variance is running.

"Also, is there another table besides the Item Master that has the most current moving average costs?"
Only the Item Master table stores the most recent cost; there is no such field as "most current moving average cost". Don't confuse the most recent cost with actual cost. The Item Master table stores the ACTUAL total cost of the item (by lot if you are costing using FIFO or LIFO).

Do you have an Adagio consultant? You should bounce these questions off of him/her and use the forum for real troubleshooting, so as not to wear out your welcome. The forum is not meant to serve as your consultant.

Steve

Thanks Steve. Your comments were very helpful.
Regards,
Rich Locus, Marco Pharma, LLC