Cost of Sales

AccountEdge uses the Weighted Average Cost method to calculate the cost of sales for an item.

Total Item Value divided by Total Item Quantity On Hand = Weighted Average Cost = ((number of items purchased * one_cost) + (number of items purchased * another_cost)) / (total number of items) = Weighted Average

Example:

  Number of Items Purchased Unit Cost Extension
  450 $12.75 $5737.50
  100 $11.95 $1195.00
Total 550   $6932.50
Average   $12.35  
Weighted Average   $12.60  

Average = ($12.75 + $11.95) / 2 = $12.35

Weighted Average = ($5737.50 + $1195.00) / 550 = $12.60

If you need to adjust the cost of the an item this support article explains how to do so.