<?xml version="1.0" encoding="utf-8"?>
<ManualTopic ID="/baanerp/wh/onlinemanual/000347" xml:lang="en">
	<Header>
		<Title xmlns:ssa="http://www.ssaglobal.com" xmlns:HTML="http://www.w3.org/TR/REC-html40">Moving Average Unit Cost (MAUC)</Title>
		<Keyword><Level1>moving average</Level1>
		</Keyword>
		<Keyword><Level1>inventory valuation</Level1>
		</Keyword>
	</Header>
	<AimSection><Paragraph>The Moving Average Unit Cost (MAUC) is an inventory valuation method that is used for accounting purposes.</Paragraph>
	</AimSection>
	<GeneralSection><Paragraph>The MAUC is the average value for each unit of the current inventory. Inventory is valued against the average receipt price. For each new receipt, the MAUC is updated.</Paragraph>
		<Paragraph>To calculate the inventory value for an item, the MAUC inventory valuation method uses all types of transactions, such as the following:</Paragraph>
		<List><ListItem>Purchase</ListItem>
			<ListItem>Production</ListItem>
			<ListItem>Service</ListItem>
			<ListItem>Inventory transfer</ListItem>
			<ListItem>Inventory adjustment</ListItem>
		</List>
		<Paragraph>When goods are received resulting from a transaction, the receipt price is used to update the MAUC value.</Paragraph>
		<Paragraph>The MAUC is calculated as follows:</Paragraph>
		<Formula><Figure UserLevel="Novice" UserType="Taskuser"><HTML:IMG SRC="../images/MAUCformula.gif" height="72" width="504" xmlns:ssa="http://www.ssaglobal.com" xmlns:HTML="http://www.w3.org/TR/REC-html40"/></Figure>
		</Formula>
	</GeneralSection>
	<ExampleSection><SectionTitle>Example</SectionTitle>
		<Paragraph>If the following transactions are carried out, the MAUC value is calculated as follows:</Paragraph>
		<TABLE border="1" width="99%"><TBODY><TR><TH width="46">Trans- action</TH>
					<TH width="76">Transaction type</TH>
					<TH width="58">Item quantity</TH>
					<TH width="97">Price per item</TH>
					<TH width="69">MAUC</TH>
					<TH width="206">Calculation</TH>
				</TR>
				<TR valign="top">
					<TD width="46" valign="top" rowspan="2">1</TD>
					<TD width="76" valign="top" rowspan="2">
						<GUIRef href="/baanerp/wh/domains/inh.ittp#receipt" role="enum">Receipt</GUIRef>
					</TD>
					<TD width="58" valign="top" rowspan="2">10</TD>
					<TD width="97" valign="top" rowspan="2">EUR 10</TD>
					<TD width="69" valign="top" rowspan="2">EUR 10</TD>
					<TD width="206" valign="top">(10 * 10) / 10 = 10</TD>
				</TR>
				<TR valign="top">
					<TD width="206" valign="top">In this case, no existing inventory on hand and no existing MAUC is available.</TD>
				</TR>
				<TR valign="top">
					<TD width="46" valign="top">2</TD>
					<TD width="76" valign="top">
						<GUIRef href="/baanerp/wh/domains/inh.ittp#receipt" role="enum">Receipt</GUIRef>
					</TD>
					<TD width="58" valign="top">10</TD>
					<TD width="97" valign="top">EUR 16</TD>
					<TD width="69" valign="top">EUR 13</TD>
					<TD width="206" valign="top">(10 * 10) + (10 * 16) / (10 + 10)</TD>
				</TR>
				<TR valign="top">
					<TD width="46" valign="top" rowspan="2">3</TD>
					<TD width="76" valign="top" rowspan="2">
						<GUIRef href="/baanerp/wh/domains/inh.ittp#issue" role="enum">Issue</GUIRef>
					</TD>
					<TD width="58" valign="top" rowspan="2">10</TD>
					<TD width="97" valign="top">EUR 13</TD>
					<TD width="69" valign="top" rowspan="2">EUR 13</TD>
					<TD width="206" valign="top">(20 * 13) - (10 * 13) / (20 - 10)</TD>
				</TR>
				<TR valign="top">
					<TD width="97" valign="top">For issues, the latest MAUC is taken as the valuation price.</TD>
					<TD width="206" valign="top">Issues do not affect the MAUC. The MAUC calculated for the issue transaction is the same as the MAUC for the previous receipt transaction.</TD>
				</TR>
				<TR valign="top">
					<TD width="46" valign="top">4</TD>
					<TD width="76" valign="top">
						<GUIRef href="/baanerp/wh/domains/inh.ittp#receipt" role="enum">Receipt</GUIRef>
					</TD>
					<TD width="58" valign="top">5</TD>
					<TD width="97" valign="top">EUR 18</TD>
					<TD width="69" valign="top">EUR 14.67</TD>
					<TD width="206" valign="top">(10 * 13) + (5 * 18) / (10 + 5)</TD>
				</TR>
				<TR valign="top">
					<TD width="46" valign="top">5</TD>
					<TD width="76" valign="top">
						<GUIRef href="/baanerp/wh/domains/inh.ittp#issue" role="enum">Issue</GUIRef>
					</TD>
					<TD width="58" valign="top">6</TD>
					<TD width="97" valign="top">EUR 14.67</TD>
					<TD width="69" valign="top">EUR 14.67</TD>
					<TD width="206" valign="top">(15 * 14.67) - (6 * 14.67) / (15 - 6)</TD>
				</TR>
			</TBODY>
		</TABLE>
	</ExampleSection>
	<GeneralSection><SectionTitle>MAUC corrections</SectionTitle>
		<Paragraph>MAUC values require correction if they are based on incorrect transaction prices. For example, if an incorrect purchase price is used for a receipt of goods, the MAUC is updated against this incorrect purchase price. You can correct the transaction price by correcting the receipt price of the purchase order. The MAUC value will be adjusted as long as the goods received are still financially present in the warehouse. In addition to purchase transactions, other types of transactions can have an impact on inventory levels and therefore influence MAUC values. For these transactions too, wrong transaction prices can be entered, which result in wrong MAUC values.</Paragraph>
		<Paragraph>If the MAUC value has become incorrect as a result of a few wrong transaction prices, MAUC correction is probably only required for a limited number of items. In the <GUIRef href="/baanerp/wh/ina/whina1231m000" role="session">MAUC Correction by Item (whina1231m000)</GUIRef> session, you can correct the MAUC value of an individual item. If a large number of items have wrong MAUC values due to, for example, system implementation failures, you can correct MAUC values for ranges of items in the <GUIRef href="/baanerp/wh/ina/whina1230m000" role="session">MAUC Correction (whina1230m000)</GUIRef> session.</Paragraph>
		<Paragraph>When the corrected MAUC value is updated for an item, SSA ERP performs the following process:</Paragraph>
		<List><ListItem>Update the new MAUC value in the <GUIRef href="/baanerp/wh/wmd/whwmd2517m000" role="session">Item Inventory - Cost Details (whwmd2517m000)</GUIRef> session.</ListItem>
			<ListItem>Create a record for the new MAUC value in the <GUIRef href="/baanerp/wh/ina/whina1512m000" role="session">Inventory Receipt Transactions (whina1512m000)</GUIRef> session and the <GUIRef href="/baanerp/wh/ina/whina1513m000" role="session">Inventory Receipt Transaction - Cost Details (whina1513m000)</GUIRef> session.</ListItem>
			<ListItem>Create a financial transaction of the Revaluation type in <GUIRef href="/baanerp/tf" role="package">Financials</GUIRef> to justify the MAUC correction. The transaction origin of this transaction is <GUIRef href="/baanerp/tc/domains/tror#revaluation" role="enum">Revaluation Order</GUIRef>.</ListItem>
			<ListItem>Create a revaluation order in the <GUIRef href="/baanerp/wh/ina/whina1522m000" role="session">Inventory Revaluation Transactions (whina1522m000)</GUIRef> session. The revaluation order is provided with a reason code explaining the reason for the revaluation.</ListItem>
		</List>
	</GeneralSection>
	<RelatedTopics><SectionTitle>Related topics</SectionTitle>
		<RelTopic><Link href="/baanerp/wh/onlinemanual/000004" role="manual">Inventory valuation</Link>
		</RelTopic>
	</RelatedTopics>
</ManualTopic>
