Inventory Control > Setting Up Inventory Control > Costing Methods > Costing Methods Reference List

Costing Methods Reference List

Use the chart in this topic as a quick reference when you add select a costing method for account sets, or when you assign account sets to items.

Costing Methods
Costing Method	Description
Moving average	Inventory Control pools the costs of all acquired units at a location, so that the costs of one unit cannot be distinguished from the costs of another. The program assigns a unit cost to items that are withdrawn from a location's inventory for sale or use. This unit cost is an average of all units in the location's pool at that time. See About the Moving Average Costing Method.
Standard cost	Inventory Control assigns the cost of the most recently acquired unit at the location to all units shipped from the location. Consequently, the units on hand in the closing inventory are assumed to be from the oldest acquisitions. The program uses the weighted moving average to value inventory. See About the Standard Costing Method.
First-in, first-out (FIFO)	Inventory Control assumes that the first units to arrive at a location are the first units to be shipped. Consequently, the units on hand in the closing inventory are assumed to be from the most recent purchases. As a result, current revenues are matched to oldest costs. See About FIFO and LIFO Costing Methods.
Last-in, first-out (LIFO)	Inventory Control assumes that the last units to arrive at a location are the first ones to be shipped. Consequently, the units on hand in the closing inventory are assumed to be from the oldest purchases. As a result, current revenues are matched to oldest costs See About FIFO and LIFO Costing Methods.
Most recent cost	Inventory Control assigns the cost of the most recently acquired unit at the location to all units shipped from the location. Consequently, the units on hand in the closing inventory are assumed to be from the oldest acquisitions. The program uses the weighted moving average to value inventory. See About the Most Recent Cost Costing Method.
User-specified	You enter the unit cost or extended cost for items as they are shipped. Stock items are received and inventory valued at moving average cost. Inventory Control uses this costing method for all non-stock items. You can also use it for stock items.