average cost is not calculated for a special order inventory item

AI generated answer (using internal Slack threads):

The average cost for an inventory item in NetSuite is calculated based on the total cost of the items and the total quantity. This includes the FOB price, duty, and freight (landed costs). However, it's important to note that this calculation can be affected by inventory-reducing transactions. For special order inventory items, such as a kit package, the average cost is not calculated because the kit is not considered an item in its own right. Instead, it's a collection of member items. Therefore, the kit itself does not have a COGS/average cost in a standard form. The average costing method in NetSuite is indeed weighted. For example, if you receive 300 units at $1 and then receive 1 at $400, your average cost is going to be significantly closer to 1 dollar than 400. This is calculated by taking the ending quantity and balance by item and then dividing them. However, this can lead to impacts when you have negative inventory. ****** Disclaimer: This response was generated by an artificial intelligence assistant based on previous conversations from multiple Slack channels, and may contain inaccuracies or mistakes. ******