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What is Item Valuation rate

Good day
I have created an item in the item master. I have check maintain stock and they ask for valuation rate. I don’t understand what valuation rate . Standard selling price for the item is $100. please help me to determine valuation rate

Hi,
simply said, valuation rate is the cost of item in inventory. For purchased item it is mostly based on price you have paid for that item, when you bought it.

For Sales, it will be the cost of item you want to sell right.

Yes, if you buy some item to sell it later, then valuation rate is price you paid for that item, and selling rate is price you get for that item after you sell it. Difference between valuation rate and selling rate is your margin.

selling price = valuation rate * margin * tax rate