Calculating the Line Extension

Unit of Measure Codes, defined in Maintain Inventory Tables (IM09/Unit of Measure Codes), are assigned to products as Stock Keeping Unit of measure (SKU) codes and Price Per codes.

The SKU for a product describes the unit in which the product’s quantities are expressed, for example: quantity on hand, quantity on reserve, quantity on back order, etc. Customer order quantities are expressed in this unit of measure. The SKU unit of measure code is shown whenever inventory balances are reported or displayed.

The Price Per code for a product describes the unit in which a product’s selling price is expressed.

Each Unit of Measure code is assigned a Pricing Factor that is used in a calculation routine to extend an Invoice, Purchase or Sales Order detail line. The Pricing Factor is designed to convert the selling/purchase price into a price that matches the selling/purchasing units.

  • When used as a Price Per Unit, the Pricing Factor is used to factor the selling price into a price that matches the stock keeping unit of measure for this product. For example, an item priced per DOZ but stocked/sold by EACH requires a Unit of Measure code with a pricing factor of "12".

The line extension is calculated as follows: 

              QTY SHIP’D   x   PRICE   x   SKU FACTOR   /  PER FACTOR
              EXAMPLE:	U/M Code: DZ   	Pricing Factor:	12  
  			U/M Code: EA  	Pricing Factor:	 1
              QTY  SKU   PRICE  PER
                2  DZ    10.00  DZ   (2 X 10.00 X 12 / 12)  =  20.00
               24  EA    10.00  DZ  (24 X 10.00 X  1 / 12)  =  20.00
                2  DZ     1.00  EA   (2 X  1.00 X 12 /  1)  =  24.00

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