Inventory Standard Costing is a practice or method to calculate the inventory item average cost based on purchase prices or manufacturing cost including labour and overheads cost.
The average cost method assigns a cost to inventory items based on the total cost of goods purchased or produced in a period divided by the total number of items purchased or produced. The average cost method is also known as the weighted-average method.
Inventory Standard Costing is useful for inventory evaluation and calculating the cost of raw materials purchased for production orders and this will by default calculate the standard cost for the final product.
How iXERP Handle Inventory Standard Costing?
iXERP as a fully automated cross-function Cloud ERP System is providing an easy way and fully automated way to calculate Inventory Items Standard Cost.
iXERP has a very comprehensive inventory and warehouses module, every product or item has detailed information based on its transaction.
iXERP calculates Inventory Items Standard Cost for every product item by averaging the price automatically from supplier invoices or suppliers delivery.
This automated transaction affects several reports in iXERP like Inventory valuation and GRN valuation and Costed Inventory Movement, it also affects the accounting module to adjust the value of inventory in the financial statements.
iXERP by using the automated calculation methods for several financial factors like Inventory Standard Costing helps businesses to run their operations smoothly and accurately by eliminating difficulties and le the system calculating the financial factors for you.
iXERP will use the Inventory Items Standard Cost when selling items and products to affect the COGS (Cost of Goods Sold) account by its cost value and this transaction also adjust all financial statements.
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