--- title: "Weighted Average Cost Grid" canonical: "https://flagshiphelpcenter.myekos.com/space/EHC1/2944106511/Weighted%20Average%20Cost%20Grid" format: markdown --- [FUEL SITES HELP] # Weighted Average Cost Grid Filter this grid by date and view the following: - Site Name - Product - Effective Date - Value --- ## Inventory Method EKOS allows users to choose an Inventory Method for valuing the fuel in a tank.  For Example, a user can select Weighted Average and this selection tells EKOS that the user wants EKOS to be ready to calculate the value of fuel in the tank based on a Weighted Average Cost method. --- ## Weighted Average Cost - an Inventory Method Weighted Average Cost (“WAC”) is an inventory method option that users can select in EKOS per tank.  If a user chooses this option for a tank in EKOS then EKOS will be ready to calculate the value of fuel in a tank based on a Weighted Average Cost method using a perpetual system. ### *Steps to setup a tank for Weighted Average* 1. Set the inventory method for a tank to “Weighted Average”. 1. When creating a new tank or updating a tank, select “Weighted Average” in the Inventory Method Field. 2. Choose a starting date 1. Choose a starting date for EKOS to begin calculating the weighted average for the tank, and find the first fuel delivery for the tank that occurred on or after the starting date you want.  This will be your “Beginning Delivery”. 2. For example, if you want to have EKOS begin the weighted average calculation on July 1st because that is the start of your fiscal year, then you would find a fuel delivery that occurred on July 1st OR the next delivery after July 1st. 3. Find the Inventory Unit Cost in your General Ledger 1. The goal of this step is to dovetail the value of fuel in your general ledger with the value in EKOS on the starting date. 2. *If this is a brand new tank without any historical fuel deliveries then skip this step* 3. If this an existing tank, then your general ledger should have an inventory unit cost for the fuel in the tank as of the starting date selected in Step 2. 4. Enter an Inventory Unit Cost for the Beginning Delivery 1. In EKOS you have to enter an inventory unit cost for a delivery so EKOS can have a starting delivery from which to begin the weighted average calculation. 2. Therefore once you enter the inventory unit value for the delivery into the tank, that will serve as the beginning unit cost for that tank and EKOS will begin calculating the weighted average cost on a perpetual basis. 3. If you are entering the beginning delivery then simply key in the inventory unit cost for the delivery 4. If you want to update a delivery that has already been keyed into EKOS then you can find the beginning delivery from the Delivery Grid and then click the edit icon to update the delivery. SUMMARY OF STEPS TO ENTER BEGINNING INVENTORY UNIT COST: Log into EKOS Home page and hover over the "Fuel Sites Icon". Hover over the inventory- and then click delivery. This will take you to the Bulk Fuel Deliveries home page. Enter the site you want to add and then click the pencil and paper icon on the far right of the row as well as the proper dates. Once it takes you to the next page, click on the Unit Cost in the lower left-hand corner to set the initial WAC. The initial WAC must be set to achieve accurate numbers in the future. Then click save and set price in the far lower right hand corner. --- ## Inventory Value Reports *PORTFOLIO REPORT:* - This report shows the current dollar value of fuel in each of your tanks. EKOS uses the last inventory reading and multiplies the units times the Weighted Average Cost perpetually managed by EKOS. In addition to the actual value, EKOS also shows you the book value calculation for reference. Each site, tank, inventory date, inventory level, weighted average cost and tank value is listed. - EKOS will run the calculation for completed days only…so if you want through 6/30 at 11:59pm or last reading) then you must wait until 7/1 to run the report. - To view this report, click on Portfolio Report in the top right-hand corner of the grid *DETAIL REPORT BY TANK:* - This report shows the dollar value of fuel for a SINGLE tank, and all transactions taking place at the tank you selected. - To view this report, go to the inventory value grid and on the right column labeled “Actions” click the report button on the row of the tank you want information about *INVENTORY METHOD DEFINITIONS* *Inventory Unit Cost***:**  The cost per unit of fuel that is entered (by the user) for a delivery. - *Beginning Delivery*:  The first delivery where a user has keyed in an [Inventory Unit Cost] will be the beginning for the WAC calculation. - *Beginning Inventory Value*:  The value of inventory in the tank on the beginning day (which is the same day that there is a Beginning Delivery (above). - *Delivery Value:*  Deliveries will always use the [Net Gallons] x [Contract Price] - *Delivery Units***:**  The total net gallons of a delivery - *Contract Price***:**  The price per gallon that the supplier charges the company for a load of fuel.  This is the number that will be on the invoice from the supplier to the company. *This is not a good name.  This is the “Invoice Price per unit” - *Daily Sales Dollars***:** The total dollars that are pumped from the tank in a day. - *Daily Sales Units:*  The total number of units pumped from the tank in a day. - *Ending Inventory Value***:**  The total value of inventory in the tank at the end of the day - *Ending Units on Hand:***  **The total number of units on hand at the end of the day. - *Beginning Units on Hand***:  **The total number of units on hand at the beginning of the day.  This number will always equal the ending units on hand from the previous day - *Current WAC:***  **The WAC before the day begins…which means before EKOS looks for any new deliveries. - *New WAC:***  **The WAC after a delivery is detected on a day and the new WAC is calculated. - *Beginning WAC* = The WAC on the beginning delivery…which is also equal to the Beginning Inventory Unit Cost --- ## Calculations - Daily Sales Dollars = [Daily Sales Units] x [Current WAC] - Beginning Inventory Value = [Beginning Units on Hand] + [Delivery Units]) X [Inventory Unit Cost] - Beginning WAC]= Inventory Unit Cost on Beginning Delivery - Ending Units on Hand = [Beginning Units on Hand] + [Delivery Units] – [Daily Sales Units] - Ending Inventory Value = [Beginning Inventory Value] + [Delivery Value] – [Daily Sales Dollars] - New WAC = ([Beginning Inventory Value] + [Delivery Value]) / ([Ending Units on Hand] + [Delivery Units]) TIP:  EKOS cannot calculate the weighted average cost unless there is an Inventory Unit Cost filled in for one delivery. On a day where a delivery is recorded, EKOS calculates the new weighted average cost.  Then EKOS calculates ALL of the sales recorded for that calendar day at the new weighted average cost calculated.  For example, if a fuel delivery happens at 2pm on Monday, EKOS will detect the delivery and calculate the new weighted average cost using the details keyed in for the delivery.  Let’s assume that the new weighted average cost was $2.50 per unit.  Then, if 1,000 units of fuel was dispensed from the tank throughout Monday, EKOS will apply the weighted average cost of $2.50 to ALL of the 1,000 units dispensed that Monday. The current weighted average cost will be used to calculate the Daily Sales Dollars for every day until a new delivery occurs. --- ## Save and Set Price Using Weighted Average - EKOS now keeps track of the weighted average cost of fuel in your tanks and allows you to set the price upon delivery entry - Users will enter the unit cost on the delivery where they want EKOS to start calculating the weighted average cost - The Save and Set Price feature enables EKOS to do the calculations for you. Once you set the price, EKOS will apply the new weighted average cost to ALL transactions beginning on that calendar day Users will be able to save the delivery and not set the price OR save and set price. If the user has elected to use weighted average cost, then EKOS will calculate the weighted average cost after save and then set the price to the new weighted average cost for that tank. NOTE:  On days when a delivery is received all transactions for that calendar day will be priced at the new weighted average cost. --- ## Multiple Fuel Deliveries in One Day If there are multiple fuel deliveries that occur for a tank during a calendar day, then EKOS will aggregate the deliveries to create a new weighted average cost for the day.