iReap POS Calculation of Moving Average Costing Method

Moving Average is one of the Costing Method (Main Menu | Setting and Parameters | Costing Method | Moving Average) that can be selected by user in iReapLite POS application. Other costing method that can be selected to is Standard Costing Method. Under the moving average inventory method, the average cost of each inventory item in stock is re-calculated after every inventory purchase. The average cost is computed by dividing the total cost of goods available for sale by the total units available for sale. This gives a weighted-average unit cost that is applied to the units in the ending inventory.

The formula of Moving Average Inventory Calculation Method:

Moving Average Rate = ( (Available Qty in stock * Average Rate) + (Incoming Stock * Incoming Rate)) / (Available Qty in Stock + Incoming Stock)

In this session, we will give you 2 example of Moving Average Calculation.


EXAMPLE 1. Moving Average inventory Valuation Method for Positive Stock

Item :Beras Pandan Wangi 5kg
Beginning Balace :10 Sack @ 20.000
Sales :3 Sack
Purchase :5 Sack


EXAMPLE 2. Moving Average Inventory Valuation Method for Negative Stock

Item :Beras Pandan Wangi 5kg
Beginning Balace :12 Sack @ 22.083,33
Sales 1 :12 Sack
Sales 2 :5 Sack
Purchase :2 Sack @ 22.000
Sales 3 :1 Sack

You can get the attachment for the calculation of Moving Average Inventory Valuation Method by click this link below

iREAP POS : iREAP stand for Integrated Retail Application, is an application designed and developed to help you managed and run store operation, consists of Point of Sale / Cashier system and inventory control system.