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

 

•Selecting this option ensures that the higher valued items receive a higher percentage of the additional cost.

 

•The freight rate that is applied to the item is derived by multiplying the item cost by the Item Value.

 

 

A P.O. Amount value of $125.00 is being distributed using the By Value distribution method. Using the above illustration, the total weight ordered is $15,000.

 

•Using the formula PO Amount / Item Value the per unit cost is 0.0083.

125.00/15000 = 0.0083

 

•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       0.0138         0.00       1.6808

  10127        2.5000       0.0208         0.00       2.5208

 

•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       0.2075         0.00        25.2075

  10127        25.00       0.2075         0.00        25.2075