Skip to content

Difference between Most Recent Cost and Last Unit Cost

Most recent cost and Last unit cost
Reading Time: 2 minutes

It is always important for the people to understand the costing. Costing may sound a complex term but here in this blog we will explain you types of cost in Sage 300 and how one can save lot of time using this feature in Sage 300.

In this blog, let’s understand the meaning of two types of Cost.

  • Most Recent Cost
  • Last Unit Cost

Most Recent Cost:

This costing approach in Sage 300 ERP is based on the most current price for that item. At the moment of purchase, inventory will be updated with the most recent price.

With each receiving document, the most recent cost is updated. Any additional prices added to the receipt are distributed over all items and added to the most recent cost. Also included in the most recent cost are any taxes included on the receipt.

For example, if an item “X” is purchased for $10/ unit; first time inventory will update $10 Cost for that item, if that same item is purchased second time at $12, then inventory will update with $12 for that item from the logic of most recent costing method.

Last Unit Cost:

Last cost, or last unit cost, is not the same as the Last in First out (LIFO) costing method. Last cost is the amount of the item on the last receiving document. Any taxes and additional cost will be excluded from the last unit cost.

Let’s understand this with the help of an example, in the below image for item A1-105/0 the most recent cost is $5.740 and Last unit cost is $5.3013333

Most recent cost and Last unit cost

In PO Module on detail line when we select the item A1-105/0 the system will automatically fetch the most recent cost or last unit cost as per the configuration done in the system.

How to Configure it in the SAGE 300?

The configuration of Most recent cost and Last unit cost is done in Purchase Order Module à Options à Processing à Default Item Cost (use dropdown)

But the biggest question is what is the difference between Most recent cost and Last unit cost?

Both the word may sound similar but there is a minor difference.

The key difference between the last cost and the most recent cost is last cost does not include any additional costs entered against the receipt. Any taxes entered on the receipt are also excluded from the last cost. The last cost can be changed at any time manually in location details, however it will be updated by any subsequent transactions.

Related Post

Contact Us

Fill in the details below and we would be glad to help you.