Calculate Unit Costs
The procedure to calculate unit cost depends on your choice of the unit cost method. Focus enables you to apply one of three methods of unit cost.
Always run the unit cost calculation routine right before you take a valuation report of your stock or at the end of a financial period, because it refreshes all the stock unit costs by incorporating all new invoices entered since the last run.
Calculating Unit Costs – Weighted Average Method
Unit cost is calculated on the basis of the formular where
- Total Life Value= Unit Cost is calculated using the total value of all job transactions, for the life of the book, for which the unit cost code is marked as ‘Included in the Unit Cost calculation’
- Total Life Quantity= Total quantity per print run is calculated from all job transactions, for the life of the book, for which the unit cost codes are marked as ‘Print Cost Code’.
To calculate unit cost
- Select Publishing> Job Costing > Calculate Unit Costs
- Click Begin Calculations
Calculating Unit Costs – Last Cost Method
To calculate unit cost based on only the last costs
- Select Publishing > Job Costing > Profile
- Select a stock code
- Then click the Calculate Cost button to manually close-off unit cost per title
NOTE
- This is done on a title-by-title basis.
- By using a system of Active and Closed Job Transactions to determine Last Print Costs, this option allows you to determine when all the relevant costs have arrived and to trigger a unit cost calculation.
- Once the Last Cost option is triggered, as shown above, the new unit cost will be based on the active-job-transactions only.
- You will be required to confirm the new unit cost figure before it is committed to the database. Focus will write the new unit cost, and then mark all relevant transactions as closed.
- Thereafter the new/active costs can then be collected as Active, and will be used in the next unit cost calculation.
- Note that for existing stock this means that unit cost calculation is derived from reprints and that origination costs, for instance, are effectively written off.
- Due largely to significant differences in prices over time, the trend has been to opt for alternative methods of calculating unit cost based on last cost, away from the weighted average method.
Calculating Unit Costs – Current Inventory Method
This method calculates unit cost per title, based on the current inventory. It adds the closing stock value for last year (same as opening stock value for current year) weighted by the closing quantity for last year (same as opening stock quantity for current year), to the current year purchases value, weighted by the current year purchases quantity. Unit cost is calculated on the basis of the formula where
- Opening value= last year closing value, held in the “Stock_Rec.LastYearClosingAmount” field, as updated at year end.
- Purchases Value= total value of curent year purchases, derived from invoices put through to Job_Trans table
- Opening Quantity= last year closing quantity, held in the “Stock_Rec.LastYearClosingQuantity” field, as updated at year end.
- Purchases Quantity= total quantity of curent year purchases, derived from invoices put through to Job_Trans table, where the unit cost codes are marked as ‘Print Cost Code’.
To calculate unit cost
- Select Publishing> Job Costing > Calculate Unit Costs
- Click Begin Calculations