There are many ways to value inventory and determine the cost used when items are used for task activities. Your organization’s accounting department determines your inventory valuation method.
The material log transaction reflects the use of the specified quantity at a total cost. The total cost is determined by the inventory method selected for the material. The Cost per Unit (CPU) shown for this transaction is the total cost divided by the quantity. Once an inventory method is selected for a material, it cannot be changed if logs have been posted to the material.
Cartegraph recognizes the following inventory methods:
- FIFO (First in, First Out): Items are used at the price of the oldest inventory item.
- LIFO (Last in, First Out): Items are used at the price of the newest in inventory.
When LIFO or FIFO calculations are based on the date of the transactions. When two transactions have the same date, the system uses the first date encountered.
- Most Expensive: The most expensive items are used first, regardless of when the items were received into inventory.
- Least Expensive: The least expensive items are used first, regardless of when the items were received into inventory.