While the cost of purchased goods is typically known when a purchase order is placed, there are scenarios where this is not possible. This is particularly true when a company resells another vendor's items and pays the vendor based on the amount for which the items were sold. For example, Company A buys an item from Company B and then sells this item to its customers. Once Company A sells the item, it pays Company B based on the sales amount, after first taking a 10% commission. So if Company A sells the item for $100, it pays Company B $90.
Food Manufacturing & Distribution includes tools that help you calculate an item's purchase cost based on sales price. Note that an item must be lot-tracked to perform such calculations. A lot number is needed to establish the relationship between specific items and vendors. If items are not lot-controlled, there is no way to tell whether the item on a sales order was purchased from a particular vendor.
To view sales information about item lots (such as unit prices, quantities sold, and gross margins) see View lot summary information.