Product Stock Inventory Costing Method
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Inventory Valuation Configuration for Product Costing Method (Odoo Standard Costing Methods)

This document will give you a basic idea about how product costing methods work in Odoo so please check below document and the video. (we made this blog and video based on odoo 15 community edition). 

Inventory valuation is finding out the valuation of inventory stocks for the costing method defined on product category form. 

Inventory valuation with product costing method:

  • The cost method (standard, fifo, avco)

    • Standard Price

    • FIFO (First In First Out)

    • AVCO (Average Cost) [Average Price] 

Costing Methods: Standard, FIFO, AVCO

The costing method is defined in the product category with below options. There are three options of costing methods.

  1. Standard Price

  2. Average Price

  3. FIFO

 

  1. Standard Price

===========================================================================================================

  • In Standard Price, Product cost should be configured or set manually on the product form by the user. 

 

Operation

Unit Cost

Qty On Hand

Value

Inventory Value


20$



0$

Receive 10 products at $20

20$

10

+10*20=200

200$

Receive 8 Products at $15

20$

18

+8*20=160

360$

Deliver 10 Products

20$

8

-10*20=200

160$

Receive 2 Products at $12

20$

10

+2*20=40

200$

 

 

Video LINK : https://probuseappdemo.com/probuse_apps/product-costing-method-standard-1240/1240

 

   

    2. Average Price

============================================================================================================

  • In AVCO (Average Cost), each product has a value of the average purchase cost of the product.

  • IMPORTANT NOTE : The average cost does not change when products leave the warehouse.

   

Operation

Unit Cost

Qty On Hand

Value

Inventory Value


0$



0$

Receive 10 Products at $20

20$

10

+10*20=200

200$

Receive 8 Products at $18

19.11$

18

+8*18=144

344$

Deliver 12 Products

19.11$

6

-12*19.11=229.32

114.68$

Receive 2 Products at $10

16.83$

8

+2*10=20

134.68$

 

Video LINK : 

https://probuseappdemo.com/probuse_apps/product-costing-method-average-cost-1241/1241

  

3. FIFO (First In First Out)

===========================================================================================================

  • In FIFO (First In First Out), the products are valued at their purchase cost. 

  • When a product leaves the warehouse / stock location, “First in, first out” rule applies by the Odoo standard and it changes the cost price when the product leaves the warehouse. 

  • IMPORTANT NOTE : When a product leaves the stock, that’s the “First in, first out” rule that applies.

 

 

Operation

Unit Cost

Qty On Hand

Value

Inventory Value


0$



0$

Receive 10 Products at $10

10$

10

+10*10=100

100$

Receive 20 Products at $5

10$

30

+20*5=100

200$

Receive 10 Products at $20

10$

40

+10*20=200

400$

Deliver 25 Products

5$

15

-10*10=100

-15*5=75


225$

Receive 2 Products at $12

5$

17

+2*12=24

249$

 

Video LINK : https://probuseappdemo.com/probuse_apps/product-costing-method-fifo-1242/1242

 


Thank you

Probuse Consulting Service Pvt Ltd