Megaventory calculates product costs based on the moving average costing method. The beginning inventory (product quantities) and cost of beginning inventory are set by the initial quantities process of the Inventory Adjustment module. With each purchase, the current unit cost of each product changes according to: 

At any time, the last unit cost, along with the current quantity, is used to determine current inventory cost. The following example helps illustrate how Megaventory deals with product costs & revenues when various documents are created:

For SKU: ABC123
Unit Sales Price: $50

  1. The costing quantity is adjusted only if an invoice or credit note is included in the row

  2. A credit to the Client is given at a unit price of $50 (full refund)

  3. A credit from the supplier is received at a unit price of $25 (full credit)

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