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

 

•For items that are sold by weight, entrée will derive the freight rate per pound by dividing the value in the Unit Cost column by the constant or average weight of the item, as defined in the Inventory Maintenance.

 

 

A P.O. Amount value of $125.00 is being distributed using the By Unit distribution method. Using the above illustration, the total quantity ordered is 600.

 

•Using the formula PO Amount / Qty Ordered the per unit cost is 0.2083.

125.00/600 = 0.2083

 

•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 Number   Real Cost   Freight Rate  Cost Markup   Base Cost

  10125        25.00        0.2083         0.00       25.2083

  10127        25.00        0.2083         0.00       25.2083

 

•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    Per Unit   Real Cost   Freight    Cost     Base Cost

Number    Weight                 Rate     Markup  

 10125     15#        1.6667    0.0139     0.00       1.6806

 10127     10#       25.0000    0.0208     0.00       2.5208