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Working With Units Of Measure On Sales Order Line Items

Working With Units Of Measures On Sales Orders

IMG00096.gif When entering a Sales Order Line Item, you are always entering Quantities from the Customer’s point of view. If the item is to be manufactured, or costed in another unit of measure, let SAFE do the conversion for you. Or, said another way: let SAFE convert the customer’s Order Quantity and Ship Quantity into the proper equivalent PACKAGE QUANTITY.

 

Example: Your customer wants to order 150 PKs of Envelopes. There are 100 envelopes in each pack. This is a total of 15,000 envelopes. However you know that the vendor prices these per thousand. So when entering the Line Item you enter the following into the Sell section:

Order Quantity: 150

Sell U/M  PK

Pack Qty  100

Unit Price  $5.00

And in the Cost section:

Cost U/M:  ‘M’.

Unit Cost:  $28.00

 

On the order entry screen, you will see that:

  1. The total quantity ordered is 15,000

  2. The Extended Price is $750.00 ($5 x 150PK)

  3. The Extended Cost is $420.00 ($28.00 x 15M)

Similarly, when you print the PO, the PO will print as 15 M @ $28.00/M

 

Lot Pricing and Costing

Based on the above, you may have already guessed at a potential problem: using a Unit Measure with a Type of ‘Lot’. Remember: using a Lot Unit of Measure means that no specific Quantity can be determined for the Product (which is why you should never use this type of Unit of Measure with an Inventoried Product).

SAFE handles Lot Pricing in the following way:

 

Example: Your customer wants to order 10,000 Flyers. You wish to sell these in four lots for $400.00 in total. Your vendor prices@ $25.00/M. So when entering the Line Item you enter the following into the Sell section:

Order Quantity: 4

Sell U/M  LOT

Pack Qty  2500

Unit Price  $400.00

And in the Cost section:

Cost U/M:  ‘M’.

Unit Cost:  $25.00

 

On the order entry screen, you will see that:

  1. The total quantity ordered is 10,000

  2. The Extended Price is $400.00 (no multiplication is performed since this is a Lot Unit of Measure).

  3. The Extended Cost is $250.00 ($25.00 x 10M)

Similarly, when you print the PO, the PO will print as 10 M @ $25.00/M

 

In other words, if you sell at a Lot price, the Extended Cost is calculated the same as if you were selling in a Package Unit of Measure Type:

(Quantity Ordered x Sell Package Quantity) / Cost Unit of Measure Quantity

(4 LOTs of 2500) / 1000 = 10M

 

Last Revision: 06.26.2012
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