Tech Tip: Why Did the Line Item Unit Cost Change after Changing the Item’s Warehouse?

I amended a purchase order by changing the warehouse of a line item. After I entered the new warehouse, I noticed that the line item’s Unit Cost changed. Why?

The following are the default unit costs used by AccountMate when you create or amend a purchase order, listed according to their priority in the costing hierarchy:

1. Inventory Vendor Price – This will be used regardless of which warehouse is entered for as long as the item + vendor is the same.

2. Last Received Cost – This will be used regardless of which warehouse is entered for as long as the item + vendor is the same and the purchase order is within the expiry period.

3. Average Cost – Each warehouse has its own average cost for the inventory item. The average cost in the warehouse will be used.

4. Zero – This will be used if this is the first time the item has transactions in the newly entered warehouse.

For more information about the costing hierarchy, see Tech Note #1180: Costing Hierarchy in the Purchase Order Module.