Inventory: Why do I have a big % gap between actual and theoretical G.P but I am not missing any stock?

Hi!

Great question!

There are many reasons as to why there may be a monetary variance between Actual and Theoretical cost.

As identified the main reason would be quantity variances on stock items.

In this case there are no quantity variances so the % gap can be accounted for by considering the following;

*Accounts which may be included in the actual cost.

For example Waste accounts are usually set to affect (be included in ) Actual COS - which means waste will be part of your actual cost and is not taken into consideration for the theoretical.

This shows as part of the monetary variance.

*Have you had to use any invoice adjustments for petty cash or suppliers?

Adjustments are not factored into the theoretical cost so will show as a variance.

*Have you purchased from a non preferred supplier?

Recipe costs drive the theoretical costs based on a preferred supplier cost for products. Therefore if you have moved away from the preferred supplier maybe the recipe is actually costing you more to produce than predicted in the theoretical.

Here's an article that might help explain! https://fc.force.com/customer/s/article/Theoretical-vs-Actual-Cost-of-Sales 

I hope this helps with your query.

If there is anything further please do let us know.

Best,

Claire

Fourth

Hi

Is there any similar reports shows gp in adaco.

Hi @Jasir Abdul Khader​ 

There is a'' theoretical vs actual Inventory report'' within Adaco but unfortunately doesn't show gross profit. We are working on an Adaco article similar to above for Enterprise and will be published to the community as soon as it gets finalized.

Thanks

Omar

Fourth