{"id":8795,"date":"2023-06-03T09:02:42","date_gmt":"2023-06-03T09:02:42","guid":{"rendered":"https:\/\/docs.daftra.com\/faq\/%d9%85%d8%a7%d9%87%d9%8a-%d8%b7%d8%b1%d9%8a%d9%82%d8%a9-%d8%a5%d8%ad%d8%aa%d8%b3%d8%a7%d8%a8-%d8%aa%d9%83%d9%84%d9%81%d8%a9-%d8%a7%d9%84%d9%85%d8%ae%d8%b2%d9%88%d9%86-%d9%81%d9%8a-%d8%a7%d9%84%d8%a8\/"},"modified":"2025-03-10T08:07:07","modified_gmt":"2025-03-10T08:07:07","slug":"how-to-calculate-inventory-cost","status":"publish","type":"faq","link":"https:\/\/docs.daftra.com\/en\/faq\/how-to-calculate-inventory-cost\/","title":{"rendered":"How to Calculate Inventory Cost?"},"content":{"rendered":"

The program follows the ‘Average Cost<\/strong>‘ method to calculate the inventory cost.<\/p>\n

Average Cost of the product = (Total Current Value + Total New Added Value) \/ (Total Current Quantity of the product + Total New Added Quantity)
\nExample:<\/strong><\/p>\n

The current quantity of the product = 10<\/strong>,
\nUnit price = 10 Saudi Riyals,<\/strong>
\nTotal current value = 10 * 10 = 100 Saudi Riyals.<\/strong>
\nNew quantity of the product = 5,<\/strong>
\nUnit price = 13 Saudi Riyals,<\/strong>
\nTotal new added value = 5 * 13 = 65 Saudi Riyals,<\/strong>
\nAverage cost of the product = (100 + 65) \/ (5 + 10) = 165 \/ 15 = 11 Saudi Riyals.<\/strong><\/p>\n

Therefore, the average cost after the last addition is 11 Saudi Riyals.<\/strong><\/p>\n

Note: The product is sold at the average cost existing at the date of the transaction.<\/strong><\/p>\n","protected":false},"author":17,"template":"","categories":[2177,2184],"tags":[3054,4853,4854,4855,4856],"class_list":{"0":"post-8795","1":"faq","2":"type-faq","3":"status-publish","4":"hentry","5":"category-inventory","6":"category-products-services","7":"tag---en","10":"tag-----en"},"yoast_head":"\nHow to Calculate Inventory Cost? - Daftra Knowledge Base<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/docs.daftra.com\/en\/faq\/how-to-calculate-inventory-cost\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"How to Calculate Inventory Cost? - Daftra Knowledge Base\" \/>\n<meta property=\"og:description\" content=\"The program follows the ‘Average Cost‘ method to calculate the inventory cost. 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