[Question] Pastel Evolution - Inventory

[Anne E]

I am trying to understand how exactly Evolution Inventory works. I currently working for a company that has just moved over to Evolution. It has been set up to use the latest cost system. But every now and then it transfers an amount to the Cost variance account. It seems to have something to do with what the last transaction was.

We only sell once off items, so would never have more that one item in stock at a time and would never have repeat orders, would last costing be the right option - average costing will defiantly not work and I am not sure of the manual costing.

Could any one advise.

Thank you in advance

[Andromeda]

If according to the inventory system you have 1 in stock at R10, and you buy in 10 at R11, the system will revalue the 1 at R10 to R1 at R11, thus crediting the cost variance account with R1 and inventory with R1.

We only sell once off items, so would never have more that one item in stock at a time and would never have repeat orders, would last costing be the right option - average costing will defiantly not work and I am not sure of the manual costing.

This kind of flies in the face of what you have said here, but it is the only way this arises.

[Anne E]

Thanks I have noticed the it seem to be when there has been errors on the invoice or suppliers invoice and they have them been credited or RTS. How does the manual option work, is it possible that may be a better option.

[Andromeda]

I gather you don't really carry inventory? If that is so then it hardly matters because the income statement will have the full cost of sales. When an item is no longer carried in stock then it's value is nil, come what may. I have not encountered the manual option, but I imagine that as it's name suggests it is more relevant to valuation of inventory, and if there is almost none then come what may the full cost will be realised in the income statement.