Subject RE: [firebird-support] average cost price
Author Maya McLeod
Yay, someone else in the same boat as me, to share my frustrations! Misery loves company ;-)

Have been researching this for the past month, and this is what I have found: In accounting terms

A *moving average* is affected by the current level in stock when the goods are received.


A *weighted average* is the total qty of goods available for sale that year, divided by the qty of goods available for sale that year.

(I can include some equations if you like)

What I'm still trying to figure out, is if the 'correct' way of doing the weighted average is 'by year', or 'by month'.
One web site complained that all computerised packages calculate it monthly, which they disagree with, but I've been unable to find any more info on that yet.

Hope this helps.


-----Original Message-----
From: Peter Sanders [mailto:psanders@...]
Sent: Tuesday, November 02, 2004 4:54 PM
Subject: [firebird-support] average cost price


The question on weighted averages prompted this question.

What do, or how do the Firebird "financial experts" calculate the average
cost price of an item purchased over a period of time?

For example goods may be purchased in bulk when on special, and sold at
normal or discount price. The quantity of goods on hand prior to each
purchase of new stock do have some bearing on the average price, though
this (AFAIK) is not normally taken into account.

I think this is "moving averages". Not being an "accountant" type :D I
thought I would seek advice here.

Kind regards

Peter Sanders

Yahoo! Groups Links