Magaya Software Accounting Manual

ACCOUNTING CONFIGURATION
COST CONFIGURATION
Select the default inventory costing method your company uses: by specific
identification or by average cost for new items added to your system. This
setting is global for your whole Magaya system. Individual costing methods can
be set on each inventory item definition if you want to set only at the item level,
not apply one method system-wide.
• Specific Identification: When items are sold according to the Specific
Identification cost method, creating an Invoice for the items will cause the
system to remove the exact amount that was assigned to the Asset account.
• Average Cost: When items are sold according to the Average Cost
method, creating an Invoice for the items will cause the system to remove
an average amount from the Assets account and transfer it to the Cost of
Goods Sold Account. This averages out the costs of the items bought at
different prices perhaps at different times or from different suppliers.
For details on costing methods, please see the section “Average Cost” in the
Magaya Software Accounting Manual.
Landed Cost:
The Landed Cost setting generates asset adjustments for the additional charges
found in Purchase Orders (PO) when the PO’s are billed. When you check this
option, also decide how to prorate the charges, by cost or by pieces. Save.
Next, go to the “Items & Services” list.
- Select the service charge such as Inland Freight Cost, and double-click to open
it.
- On the tab “Landed Cost,” check the box to include this non-inventory charge
in Landed Cost. (Note: This tab only appears when configured to activate it.)
What will happen: When a PO is created with this Inland Freight charge, the
charge will be distributed across the items in the list. See the PO dialog box to
view how the costs are prorated. Tip: Right-click in the Commodities screen of
the PO to choose the columns if needed to view them.
When a PO with charges for landed costs is billed, the Bill for the other charges
will also contain an asset adjustment.
146