Why do I have a negative margin after fixed the average landed cost?

Vandana Yadav
Updated : October 24, 2024 09:56 Created : November 04, 2020 00:25

Answer:

The margin is computed based on the average landed cost (ALC) and selling price of the product.
The ALC is calculated based on the purchase price + any other costs associated with getting the stock to you (excluding taxes). Below is our formula for margin calculation for normal stocked products:

% (unit sale price - ALC) / unit sale price.

Product: Elderflower
Sale price on SO-00064 = 9.96
ALC = 10.9232

Margin = % of (9.96 - 10.9232)/9.96 = -9.67%

Since all the products added to the SO have the landed costs greater than their selling price, this sales order is bound to have a negative margin. To see how the ALC of a product has changed throughout its existence in your system, navigate to the "costs" tab of that product record.

Alternatively, you can utilise cost analysis report to see the ALC changes of one or multiple products.

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Why do I have a negative margin after fixed the average landed cost?

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