You average out the cost of your inventory - average costing.
If you adjust your price based on the last cost - you will be selling your old inventory at a reduced margin or l at loss.
The amount of price reduction depends on inventory turn over and the rate cost of inventory is decreasing.
That's why price decrease should be lagging behind the actual cost decrease. If the CDN dollar becomes weak again, you should also expect the price increase to lag behind the rate CDN is devaluing.
If you adjust your price based on the last cost - you will be selling your old inventory at a reduced margin or l at loss.
The amount of price reduction depends on inventory turn over and the rate cost of inventory is decreasing.
That's why price decrease should be lagging behind the actual cost decrease. If the CDN dollar becomes weak again, you should also expect the price increase to lag behind the rate CDN is devaluing.
