I am fairly new to BaaN and am using ver 7.1. I am trying to determine how MAUC is calcuated. My original thought was that purchase price alone modified the value, but as I learn more, I am learning that this is not the only variable that creates the moving average value. At a high level, can anyone give me some other factors that play into this?

Thanks

Hi absalon,

This is a basic accounting concept. It's OK if you don't understand it at first, because (I'm assuming) you're not an accountant.

Accountants need to know the value of the inventory (for the very basic reason that they need to know where all the money in a company are going). As goods come in and out of a warehouse, it can be pretty hard to accurately track from which particular shipment the goods being taken out was actually from. So, they invented the MAUC method of assigning cost to inventory. Every time there's new shipment coming in, the accountant would calculate the new average price for the inventory. Every time some quantity of goods come out, the accountant would assume that the value of goods coming out of the warehouse is simply the quantity multiplied by the latest average price

Hence in BaanERP, when new purchased receipt was made, new average price is calculated to take into account the purchase price of the goods just received. Goods that enter warehouse in other manner (production receipt, warehouse "shortcuts", etc) are assumed to come in at their standard cost and new average price is calculated to take this into account

Rgds,
Paul

Here is a bit of explanation regarding MAUC, which I jusy digged up from some old documentation:


The MAUC is calculated at the moment of receipts, for purchase reciepts it
uses the reciept price for calculation and for production order reciepts the
reciept price is substituted with the cost of the item + surcharges and is used
for caluculation.

Moving-average unit cost is an inventory valuation method that values the
inventory against the average receipt price. The moving-average unit cost
(MAUC) is recalculated each time there is a receipt. The new MAUC is calculated
as follows:
MAUC = (old on hand * old MAUC) + (receipt quantity * receipt price) / (old on
hand + inbound quantity).

If there is a change in price after reciepts (eg: in session Change
prices/discounts after reciepts) , then the session "Process inventory
variances" should be executed for the correct Mauc calculation.

Hope this helps a bit.


Regards,
En