- | # Method of updating average price Cumulative Purchases The average landed cost price is based on the following: The price of a new receipt. The average price of the cumulated purchases up to the time of the new receipt.
      APN = ((PR * QR) + (APO * CRO)) ÷  (QR + CRO)
- Current Inventory The average landed cost price is based on the following: The price of a new receipt. The average price of the current inventory level.

      APN = ((PR * QR) + (APO * ILO)) ÷ (QR + ILO)
        APNAverage landed cost price (new)APOAverage landed cost price (old)PRPrice of the new receiptQRQuantity of the new receiptCROCumulative receipt quantity (old)ILOInventory level (old)
Old (current) inventory considers the existing inventory on hand minus the not yet matched and approved receipts. Consequently, the average price is based on financially matched and approved purchases. If the method is set to Current Inventory and the APN calculation outcome is negative, the average landed cost price receives the same value as the latest landed cost price. |