When the By Weight cost distribution method is selected, entrée will divide the P.O. Amount by the sum of the Wgt Ordered column.

 

•For items that are not sold by weight, entrée will derive the freight rate per unit by multiplying the value in the Unit Cost column by the constant weight of the item, as defined in the Inventory Maintenance.

 

 

The By Weight cost distribution method will only be able if all of the items on the master purchase order have a constant or average weight defined in the Inventory Maintenance.

 

 

For this example a P.O. Amount value of $125.00 is being distributed using the By Weight distribution method. Using the above illustration, the total weight ordered is 6500.

 

 

 

•Using the formula PO Amount / Wgt Ordered the per unit cost is 0.0192.

125.00/6500 = 0.0192

 

 

 

•The following table illustrates how the distributed cost of the supplemental PO

affects the base cost of the item, if the item was sold per pound.

 

 Item Number   Real Cost   Freight Rate  Cost Markup   Base Cost

  10125        1.6667       0.0192         0.00       1.6859

  10127        2.5000       0.0192         0.00       2.5192

 

 

 

•The following table illustrates how the distributed cost of the supplemental PO affects the base cost of the item, if the item was sold per case.

 

 Item    Per Unit   Real Cost   Freight    Cost     Base Cost

Number    Weight                 Rate     Markup  

 10125     15#       25.0000    0.2880     0.00      25.2880

 10127     10#       25.0000    0.1920     0.00      25.1920