Understanding the Moving Average Cost (MAC) in Katana is essential for accurate inventory valuation.
What is MAC?
Moving Average Cost (MAC) is Katana’s inventory costing method. It calculates the average unit cost of an item by dividing the total stock value by the quantity in stock.
After each incoming stock transaction, the MAC is recalculated to include the cost of new items. Outgoing transactions do not change MAC — they use the current MAC to value the stock leaving inventory.
Katana only supports the MAC method (FIFO/LIFO are not supported).
An example of how MAC works:
First purchase
Buy 10 pcs of Material X @ $10 each.
Total stock value = 10 × $10 = $100
MAC = $100 ÷ 10 pcs = $10
Second purchase (different price)
Buy 5 pcs @ $13 each.
Purchased value = 5 × $13 = $65
New total stock value = $100 + $65 = $165
New total stock = 10 + 5 = 15 pcs
MAC = $165 ÷ 15 pcs = $11
Outgoing usage
Use 8 pcs to manufacture Product Y.
MAC stays $11 for remaining stock.
Used value = 8 × $11 = $88
New total value = $165 − $88 = $77
New quantity = 15 − 8 = 7 pcs
MAC = $77 ÷ 7 pcs = $11
Special Considerations
MAC by Location
MAC is location-specific.
Different purchase prices or manufacturing costs at each location mean each location can have its own MAC.
Past document changes
Changes to stock-affecting documents can only be made in open inventory periods.
Any change triggers recalculation for that variant and related variants.
What affects MAC
Affects MAC | Does not affect MAC |
Purchases (different prices) | Sales orders |
Adding costs to received POs | Negative stock adjustments |
Positive stock adjustments (with unit cost) | Stock transfers from origin location |
Stock transfers to destination location | Materials used in manufacturing |
Manufacturing finished products |
|
Incoming stock from any source |
|
Notes:
Adding costs to a received PO changes stock value and triggers MAC recalculation.
Stock transfers affect the destination location’s MAC (keeps origin MAC if different).
Manufacturing adds new products with manufacturing costs to inventory.
Fixing inventory or MAC issues
If MAC or inventory values are incorrect:
Option 1 – Backdate Orders
If still in an open inventory period, backdate the order to adjust MAC historically.
Option 2 – Stock Adjustments
Create a negative stock adjustment to bring quantity to zero (removes old MAC).
Create a positive stock adjustment to re-add the correct quantity with the desired unit cost.
This can also be done via spreadsheet import of stock levels and values.
Result: Understanding MAC ensures accurate inventory valuation, proper COGS calculation, and consistency between Katana and your accounting.
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