When you use the Receive by Shipment option to record that a product has been received from a vendor, the system automatically recalculates the average cost for that product in the warehouse. In addition, the system updates the on-hand quantity as appropriate. (For more information, refer to About average costs and on-hand quantities.) However, this automatic recalculation and on-hand quantity update does not take into consideration the freight amount.
The freight amount for the entire shipment can be specified for the receiver at receiving time. Once all of the products on the receiver have been received, you can have the system allocate the freight amount to individual items on the receiver. When you allocate freight to a receiver, the system determines the average freight amount per product, and that average is allocated to each of the products on the receiver that arrived in your warehouse. Since the average costs of the products and the on-hand quantities have already been updated at receiving time, only the freight amount needs to be incorporated into the average cost. The following equation shows how the system calculates the new average cost of a product:
|
New Average Cost |
= |
(Product's Freight Amount + On-Hand Cost) |
|
On-Hand Quantity |
where
|
Product's Freight Amount |
= |
Total of All Costs for This Product on This Receiver |
X |
Total Freight Amount for the Receiver |
|
Total Received Cost |
and
On-Hand Cost = On-Hand Quantity X Current Average Cost
The following are rules for allocating freight:
If no freight amount has been entered for the receiver on the PO Line Item screen of the Receive by Shipment process, freight cannot be allocated.
If no receiving has been done for a receiver on the PO Line Item screen of the Receive by Shipment process, freight cannot be allocated.
The freight amount for the receiver cannot be changed after allocation is complete.
Allocation can be done only once for a receiver.
Note: To allocate the freight amount to the receiver, you must have the proper security privileges. The Freight Allocation job function needs to be assigned to one of your roles. Roles are assigned to users in the User Maintenance on the Security Maintenance screen of the Vision Configuration tab. For more information, refer to About roles and job functions.
To have the system allocate freight for a receiver, go to the header area of the PO Line Item screen in Receive by Shipment. At the command line prompt, select the (A)llocate Freight option. This option is available only if the Freight Allocation job function is assigned to one of your roles.