Expected Cost Price
The expected cost price is the price Rackbeat will default to when an item is to be ordered from a supplier.
In practice, this means that Rackbeat will, by default, use this price for the product when a purchase order is created. This does not mean that the product must be purchased at this price—of course, it can always be adjusted, as prices may vary from order to order. The expected purchase price does not determine the actual unit value of the item in inventory—it is simply a helpful reference in the purchasing process.
You enter the expected cost price yourself under the product information.
Cost Price
The cost price reflects the actual inventory value of a given product in stock—so a product does not have a cost price if there is nothing in stock.
Since a product may be purchased at different prices over time, the unit value of a product can change continuously. Therefore, a product's cost price affects the total value of the inventory.
This value is calculated based on the selected inventory valuation method.
In Rackbeat, you can work with either average cost price or FIFO (First In, First Out).
If the ‘average cost price’ method is used, the inventory value is calculated based on the average of your purchases.
If the FIFO method is used, the inventory value is calculated differently—here, the value is based on the principle that the first items purchased are also the first sold.
Learn more about the difference between the inventory valuation methods average cost price and FIFO here.