Incorrect Stock Valuation

Hi all,

I am hoping someone can point out what I am doing wrong with one of my raw material’s valuation. The raw material is 20-foot-long, aluminum extrusion made by one manufacturer, and is cut to 4.95 inches by another manufacturer. The BOM for the 4.95" piece is shown below.

We can cut forty-five 4.95" pieces out of every 20’ extrusion. The buying rate for the 20’ extrusion (4701-000008-002) is 79.89, so valuation rate pulled from the BOM for every 4.95" piece (4701-000009-002) is $ 1.77. Since, we send the 20’ extrusion to another manufacturer to cut there is an additional $5 charge per cut. See the Purchase Receipt below.

I checked the raw materials supplied box. The new valuation for the 4.95" extrusion piece (4701-000009-002) should be $ 6.77. The stock ledger also indicates the valuation should be $6.7755. See screenshot below.

However, when the cut extrusion (4701-000009-002) is used as a raw material for another BOM the valuation rate is only $ 1.77551. See below.

I’ve tried to update costs without any luck. Am I taking the right steps for ERP to accurately calculate the item’s valuation?

Thank you for your patience.


What’s the Valuation rate of the Extrusion (4701-000009-002) in the Item Master?
Not sure if there are changes to the valuation rate in tbe BOM raw materials, but the valuation rate for raw materials may be taken from the Item Master instead of the valuation rate reflected in the Purchase Receipt.

Again, I’m not so sure with this one. So if anyone knows the correct answer, please correct me if I’m wrong. :slight_smile:

Hi @littlehera,

For item 4701-000009-002, I do not have the valuation rate recorded on it’s Item Master page.

Hi @littlehera,

Reaching out again because adding the valuation rate to the Item’s Master page does not affect the valuation rate on the BOM. The Item’s Price is set to $5, and the Stock Ledger does reflect the valuation rate as $1.77. There is not a Purchase Receipt with the low priced rate of $1.77. What else could affect the item’s valuation rate?