Issue:

The average cost is incorrectly calculated at Inventory Master when FOC items are received via Purchase Receive Form

Business Scenario

When new supermarkets are launched, the suppliers offer deals to the supermarkets. Most of the deals are FOC deals so that the supermarket can give better prices and attract more customers.  Consider the below example:

Tappoos gives 10 Cadbury chocolates FOC at the purchase of 100. The Purchase Price for this is $5.00 plus VAT. Assuming this is my first Purchase and the supermarket buys 500 Chocolates, then below is our average cost formula:

(Total Cost / Total Quantity)

Total Cost: (500*5)+(50*0) = $2500 VEP

Total Quantity: 500 + 50 = 550

Average Cost: (2500/550) = $4.55
Last Cost: $5.00

Based on the above pricing, the supermarket can sell this $5.46 Plus VAT making a 20% profit.

v 12 System Calculation (Incorrect):

The system is currently posting the FOC items at the purchase price via adjustment so the Systems Average Cost populated is $5.00. With this setup, the company is only seeing a 9% profit which is incorrect because the FOC items have also been posted at the purchase price. This was working fine in v11. It has been changed from v12.

PART A - Development work for this case has been completed.

1. The change will be available in version:12.30.0203

2. The following changes were made(Include Database object names, Program classes and any other relevant information):

1. Corrected the purchase receive process to calculate the average cost using FOC quantity.

3. Affected Areas:

1. Purchase receive - FOC

4. The issue was caused by:

1. FOC items were not included in avg cost calculation.

5. Notes: 
6. Next Step: UAT

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PART B - Development Reference:

1. Changes implemented was according to the approved design (Y/N):

2. Variations to the approved design: