For inventory evaluation and trends two Costing methods are very efficient which are Last Cost and Most Recent Cost. Going further, in this blog we will discuss about difference between Last Cost and Most Recent Cost.
Most Recent Cost
The most recent cost is updated with each receiving document. Any additional costs entered against the receipt are pro-rated to all the items and are included into the most recent cost. Also Taxes entered on the receipt are included in the most recent cost. At the location details costs are getting updated after IC Day End processing is run. It is not getting updated in the location details not when the receiving is done. Inventory will use the most recent cost when inventory is allowed to go negative or no receipts are entered for an item at a given location. The most recent cost can be overridden at any time manually in location details, however it will be updated by any subsequent transactions.
Last cost, or last unit cost, is not the same as the Last in First out (LIFO) costing method. Last cost is the amount of the item on the last receiving document. The key difference between the last cost and the most recent cost is last cost does not include any additional costs entered against the receipt. Any taxes entered on the receipt are also excluded from the last cost. The last cost can be overridden at any time manually in location details, however it will be updated by any subsequent transactions.
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