Answers to common questions about moving average costing in Microsoft Dynamics AX 2012
The moving average inventory valuation method has been added to Microsoft Dynamics AX 2012. This method of inventory valuation is often used by retailers and wholesale distributors.
A fourth product/item dimension (style) has been added to better enable Stock Keeping Unit (SKU) support across Microsoft Dynamics AX.
Additionally, support for high volume sales processing has been added by enabling the import of sales invoices without requiring associated sales orders.
There are some helpful Technet articles about Moving Average:
1. What are the basic differences between weighted average and moving average methodologies?:
Weighted average in AX is actually a Periodic weighted average.
Weighted average date is a retrospective Perpetual weighted average (As time stamp is not used the average is calculated per day)
Moving average is a pure Perpetual weighted average
2. With the moving average method, what happens with the adjustment and closing processes? Is there a revaluation that happens?
The Adjustments occur in real time. This means that IC as such really does not adjust the transactions. A revaluation can be posted at any time as a manual process
3. Does the month end process revalue transactions related to simple production? Does the BOM moves get revalued?
The Raw material issue at current MWA cost. FG post at current calculated cost. If the FG is still in inventory when you End the production order then any difference goes to inventory of the FG.
If the FG is already consumed the adjustment will be posted to the Price difference account (Expensed)
4. How does the system handle purchase price variance where there are other misc. charges included in the receipt cost. Ex:Product Supplier charges 20.00 / unit Misc charge for trucking is 2.50 /unit
If the Misc. charges are posted as part of the invoice these will be seen as Material cost and proportional distributed like the value between Product receipt price and Invoice price.
In case the Misc. charge is posted after the Invoice it will be expensed to the price difference account
5. Do inventory adjustment journals , inventory movement journals, transfer journals, item arrival journals adjust the moving average?
The transfer journals does not adjust the MWA unless the dimensions you transfer between are financial tracked.
Counting journals always only post at current MWA
Other journals by default post at the moving average but user can choose to override for receipts (Issues always occur at current MWA)
Special thanks to Anders Even Girke for providing further information on this topic.
