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Variable Cost %

Variable Cost % Definition:

 
Note: If the Change Price (F4) option is selected and the price is changed, the originally calculated cost of the Variable Cost % Item will NOT change.  Additionally, customer contract prices and customer price discounts will not affect the original calculated cost of the Variable Cost % Item.  
 
Tip: The primary reasoning for this methodology is for departmental items such as loose bolts and nuts. These types of items are grouped together, normally are not inventoried individually, have a zero price, and an unreliable average cost.  By using the Variable Cost approach on screws for example, a $.05 item will have the same gross margin as a $2.00 item, giving a better representation of your actual gross margin for these items.