The average cost in Finale Inventory for each of your items in inventory is calculated by the system when you purchase items on a Purchase order and receive it into stock.
You may see items in your inventory that do not have an average cost at all, or maybe the average cost is not what you expect.
The number one reason average cost may be incorrect is you received inventory on a shipment against a purchase order when the stock on hand of that item was negative.
In an effort to help explain to you how Finale Inventory would show a higher than expected average cost for an item, please see this picture.
Finale Inventory has a "shadow" accounting ledger that it must balance.
This example shows what happens to your Average cost when you Receive a Purchase Order shipment into inventory when your current QoH is Negative.
The system must balance the books at the expense of future transactions.
We will be looking at making two improvements in Finale Inventory in the near future.
1. Exposing this situation on the details page of every product id.
2. Making a new shadow inventory adjustment transaction to a new Inventory variance adjustment account that will hold the missing value of inventory when someone receives a PO shipment when the Qoh is negative, which will allow for a more expected result in the Average cost calculation but will mandate that the lost inventory is either corrected or written off the books.
We hope that helps.