How to Calculate Inventory Cost in Daftra?

The program follows the ‘Average Cost‘ method to calculate the inventory cost.

Average Cost of the product = (Total Current Value + Total New Added Value) / (Total Current Quantity of the product + Total New Added Quantity)
Example:

The current quantity of the product = 10,
Unit price = 10 Saudi Riyals,
Total current value = 10 * 10 = 100 Saudi Riyals.
New quantity of the product = 5,
Unit price = 13 Saudi Riyals,
Total new added value = 5 * 13 = 65 Saudi Riyals,
Average cost of the product = (100 + 65) / (5 + 10) = 165 / 15 = 11 Saudi Riyals.

Therefore, the average cost after the last addition is 11 Saudi Riyals.

Note: The product is sold at the average cost existing at the date of the transaction.