EXAMPLE – AVERAGE COSTING METHOD
The following example, which illustrates how transfer entries are applied, is based on the following scenario for an item using Average costing method and an average cost period of Day.
1. The user purchases the item at a cost of LCY 10.00.
2. The user purchases the item again at a cost of LCY 20.00.
3. The user transfers the item from BLUE to RED location.
The following table shows the effect of the transfer on the item’s value entries.