The Inventory Valuation is a date sensitive report designed to tell you the value of your inventory at a point in time.

The table in blue below is a sample of various transactions.

On 1/1/15 the club purchased 50 units of an item at $10.00 a unit, the overall cost is $500.00.

Between January 5th - January 8th, 16 units were sold at the average **cost** of $10.00. Note, costing has nothing to do with the sale price. This left the club with 34 units at $10.00 per unit with an valuation of $340.00 (34 X 10)

On January 15 the club purchased 10 more units at $12.00 each. This will raise the valuation and the unit cost. We now have 44 units at a total cost/valuation of $460.00 - the average cost is $10.45.

On January 20 the club purchased 10 more units at $15.00 each. This will raise the valuation and the unit cost. We now have 54 units at a total cost/valuation of $610.00 - the average cost is $11.30.

On January 22nd we had a sale of 10 units, the cost at this time is $11.30. Sales do NOT change the unit cost, only the quantity on hand. Therefore our quantity fell back to 44, but our unit cost remains at $11.30

Below is a sample valuation report.

The **Average Cost** is based on actual numbers and calculations. This is the number the accountants would use is their general ledger.

The **Standard Cost** is based on the costing number entered in the item profile. In a perfect world, this would be the expected cost of the item times the quantity on hand.

The **Most Recent Cost** is based on the last purchase times the quantity on hand.

The **Selling** total is based on the sales price of the item times the quantity on hand.

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