How to Calculate AWAC, Amalgamated Weighted Average Cost

To understand how the Amalgamated Weighted Average Cost for an Item is calculated, begin with basic information about the item. For example, using two sites, Boston and Chicago, obtain On Hand Quantity (A) and Weighted Average Cost (B) from the Sites tab on the Item.

Site	(A) On Hand Quantity	(B) WAC from Sites tab
Boston	35	$ 8.32
Chicago	13	$ 9.66

First, calculate the value of the inventory at each Site, which we’ll call Site Value, Column C.

Site	(A) On Hand Quantity	(B) WAC from Sites tab	(C) Site Value
Boston	35	$ 8.32	$291.20
Chicago	13	$ 9.66	$125.58
Totals	48		$416.78

Second, total the On Hand Quantity, Column A, for all Sites and total the Site Value, Column C as seen in the Totals row above.

 

Third, calculate the Amalgamated Weighted Average Cost. Divide the Total Site Value, the total from column C, by Total OH Quantity, the total of Column A.

$416.78 / 48 = $8.68

 

For this item, the Amalgamated Weighted Average Cost is $8.68.