Hello,

I am sorry for late reply. May I know your inventory accounting method. Product cost should never go to -ve even with AVCO. You can filter the purchase item for that product in phpmyadmin and check the if there is any purchase item with -ve cost. I am really not sure why this is happening 😦

Dear Mian,
Good day brother, indeed i made a very deep investigation in that matter, and came across a real fact how things are going on with AVCO and FIFO, this is going to be long but i am sure you will benefit from it at the end.
with AVCO the idea is very simple, suppose we purchased 10 pcs of product X for total of 100$
suppose we sold 3 items, till now no problems at all.
suppose we purchased more 10 pcs of product X for total of 90$
now the AVCO does the following
remaining items from first purchase is 7 x 10 $ = 70$
second purchase is 10 x 9$ = 90$
Total items is 17 pcs
total amount 160$
AVCO item X = 160$ / 17 = 9.41$ AVCO
This is the typical scenario which works fine, so far so good
BUT, and i want 3 lines under BUT,
IF ANYONE ATTEMPT TO CHANGE THE PRICE IN THE PURCHASE ORDER IF IT IS ALREADY PLACED AND SUBMITTED OF ITEM X THE WHOLE AVCO WILL GO WRONG, NO MATTER WHAT YOU DO, THE ITEM COSTING WILL PICKUP WRONG NUMBERS.
I tested that on 3.4.29 and 3.4.37 the same.
the only way to avoid that is to go with FIFO which is also correct in financial accounting.
With FIFO even if you change the price in the purchased order of any item it will update the costing according to the new price since it is using FIFO, so the system knows the cost of the first batch and second batch and so on.
hope this will be a valued info for all of you.

Hello, Thank you very much for the details. Yes, it's very help and I will be checking this soon. Thanks again

my pleasure brother, if you want the AVCO to work fine, maybe you can lock the purchase order price item after it is placed, only qty can be modified.
Sure you know better.
Regards.

Hello,

Can you please help me test this again on live demo? I have just updated the demo.

Thank you

Saif Fuad I am now seeing the same problem as this case which my product cost is - "minus" and i am currently using AVCO.
I am using version 3.5 so it is quite up to date still.

Mian Saleem You have updated on this issue?

Prom Vongchann You can select the products on listing page and then Set Average Cost from page menu then check again. Thanks