Average costing method: determining unit costs

Unit cost represents the normal or specified cost used as the basis for measurement against an actual. Unit costs for manufactured items include labor, material and overhead, vendor acquisition, freight, duty fees and other categories for purchased items.

Unit cost for physical kits is determined by the sum of the unit costs for all components of the kit PLUS the WIP Cost Factor defined for the item in the item master. If the WIP Cost Factor is not available on the item master, the WIP Cost Factor defined for the Primary Enterprise of the catalog organization is used.

Unit cost is stored differently depending on the base cost used for its calculation.

Sterling Selling and Fulfillment Foundation provide the capability to define unit costs based on the following methods for determining inventory value: