How to Adjust the Unit Cost for On-Hand Quantities of Inventory Items in Sage 100

For Sage 100 Versions 4.40 and later:

Standard Cost:
Use the Standard Cost Adjustment utilities. This utility will correct the Standard Cost, as well as properly update the General Ledger files.

Average Cost:
To change average cost, the total quantity in all warehouses needs to first be adjusted out at the current (incorrect) average cost. This adjustment will reduce the inventory quantity and value to 0. Once the inventory has a $0 value, the same quantity can be adjusted back in at the correct average cost. This transaction will update General Ledger with the new inventory value.

LIFO, FIFO, Lot, and Serial:
The negative and positive adjustments must be made to the same cost tier (i.e. the receipt date and reference for LIFO/FIFO or lot/serial number for lot/serial items) by clicking the distribute (Distrib) button on the Transaction Entry Lines tab and distributing the quantities to the correct cost tier. In other words, for a FIFO item, if the cost was incorrect on a particular FIFO tier, the negative adjustment would be entered for the quantity in that tier at the current (incorrect) cost and then distributed back to that tier with the correct cost

Note: For Serial / Lot items, you must first update the negative adjustment before entering the positive adjustment. For the other valuation methods, the negative adjustment and positive adjustment can be within the same update.

Steps for Transaction Entry:

1. Open Inventory Management, Main, Transaction Entry,
   1. Select Transaction Type Adjustments
   2.  Click # for the next available Entry Number.
   3.  Select Default Warehouse
2. On the Lines tab, select the Item Number to be corrected.
   1. Enter Quantity as a negative number that will relieve the total quantity on hand for the warehouse selected.
   2.  If the items has LIFO, FIFO, Lot, or Serial valuation, select the tier to be adjusted.
   3. The old (incorrect) cost will populate the Unit Cost. Click OK.
3. Select the same Item Number to be corrected. 
   1. Enter Quantity but as a positive number that will add the same quantity back to the total quantity on hand for the warehouse selected.
      2. If the items has LIFO, FIFO, Lot, or Serial valuation, select the tier to be adjusted (or a new tier can be created).
      3. Enter the new (correct) cost for the Unit Cost. Click OK.
      4. Click Print.
4. On the Inventory Transaction Register screen, confirm the correct Inventory Management Posting Date is: date is showing and click Print.
   5. “Do you want to update the Inventory Transaction Journal?”, click Yes.
   6. “Do you want to print the Daily Transaction Register?”, click Yes.
   7. On the Daily Transaction Register screen, click Print.
   1. Note: the difference between the original cost and the new cost is posted the Inventory Adjustments account for the product line in Inventory Management / Setup / Product Line Maintenance.
5. Do you want to update the Daily Transaction Register?”, click Yes. 

For Sage MAS 90 or 200 versions 4.30 and earlier Standard Cost only:

For Standard Cost items, although the standard cost can be manually changed within Inventory Maintenance, this change will not update the inventory value in General Ledger. Using an adjustment to bring the total quantity (for all warehouses) to 0 at the current (incorrect) standard cost will bring the total quantity and total value in inventory to 0. At that time, you can manually change the standard cost within the Inventory Masterfile and adjust the total quantity back in at the new standard cost. This transaction will update General Ledger with the new inventory value.

The Automatic Cost/Price Change utility can also be used to update the standard cost for ranges of items. This utility does not update the General Ledger. A Journal Entry will need to be made for the difference in inventory value. The Inventory Valuation Report should be printed before and after the change and then used to make adjustments in General Ledger.

If the item has a bill of material, the Cost Roll up Register can also be used to change the Standard cost.