Overview

This document explains the four Decor Fusion cost fields and their functions. These costs can be found under Inventory → Pricing and Costs Tab.

Procedures

Standard Cost:Standard Cost is the value of an item for which you think you will be paying to purchase that item. This cost is manually maintained. The Vendor → Purchasing Tab → PO Cost Source is set to Standard Cost by default for purchasing purposes. This cost field is used as the basis of Gross Margin pricing. If the Standard Cost is updated and the item’s pricing method is Gross Margin, the result will be a new List Price even though the Gross Margin percent has not updated. The Standard Cost should not be used as the POS Costing Method which is found in Edit → Software Settings → Company and Stores → Company Settings → Point of Sale.

Average Cost: The Average Cost in Decor Fusion is maintained by the system during the PO receiving process, either through Purchase Orders or through Inventory Transaction Receipts.  The Average Cost is a calculated weighted average value,based on last cost values of an item, covering the entire purchasing cycle. Average Cost is the recommended POS Costing Method to determine sales margins.

Last Cost: The Last Cost field is maintained by the system and reflects the last recorded cost of a purchased item, either through Purchase Order or through Inventory Transaction Receipts.  The Vendor → Purchasing Tab → PO Cost Source can be manually set to use Last Cost, which the system will then use when creating Purchase Orders.  The Last Cost is not recommended for use as the POS Costing Method.

PO Cost: This is an optional cost field. When activated, this cost field is only used during the Purchase Order process and is manually maintained to the value the user thinks they will pay to purchase an item.  If this feature is active, the costing method in the Vendor→ Purchasing Tab → PO Cost Source is set to PO Cost.  This cost should never be used as a POS Costing Method. If this cost is active, it allows the user to include things like tint charges in the value of Standard Cost when determining Gross Margins.