What is Cost Price?
Cost price is the overall cost of the total number of items you have in stock. They may have been purchased at different "Purchase prices".
For example, lets say, you buy 5 pieces @$10 each today. The cost is updated for this product as $10/unit.
Now you make another purchase of 5 pieces @$20 each.
The cost will be updated as $15 by taking the weighted average with the existing inventory.
In the example, the Purchase price was $10 and $20 at different points in time.
While the inventory cost is $15/unit.
Cost price is determined by the actual landed cost of each product. Cost prices are used for stock valuation and calculating the gross profit. Cost price is automatically updated when you purchase an item. You can also enter the cost of products directly in Sumtracker. There can be only one cost price of each product.
What are Purchase Prices?
Purchase prices are the prices you have negotiated from your supplier and intend to buy your products at this rate. They are used in making purchase orders. There can be multiple purchase prices for a product, since it can be sourced from multiple suppliers and can have different purchase rates from each one.