The NCAS allows a warehouse to mark up the price of inventory items that are issued to customers. This price mark up is referred to as storage overhead. Storage overhead is established at the item-warehouse level on the Item Warehouse Accounting Entry (IWAE) screen. In other words, the storage overhead values established on the IWAE screen apply only to specified items in specified warehouses.

Note: If you are establishing storage overhead for a new item (in other words, the item has just been linked to your warehouse), you can use the Item Warehouse Accounting Entry (IWAE) screen to establish storage overhead. If your warehouse has stocked the item for some time, but has only recently made the decision to apply storage overhead, then you must use the Item Warehouse Accounting Update (IWAU) screen to establish storage overhead.

Issuing Cost = Average Cost + Storage Overhead

For example, your agencys warehouse stocks insulin. The current average cost of the insulin is $9 per vial. Your warehouse has decided to charge a storage overhead for insulin. Your warehouse could charge a fixed storage overhead of $1 per vial or a variable overhead of 10 percent of the current average cost per vial of insulin.

• With the fixed overhead, the cost of the insulin to the customer would be $10 per vial (current average cost of $9 plus storage
• With the variable storage overhead, the current overhead value would be $0.90 (10 percent variable overhead multiplied by the current average cost of $9). The cost of the insulin to the customer would be $9.90 per vial (current average cost of $9 plus variable storage overhead of $0.90).

Note: If your warehouse decides to establish both a fixed overhead and a variable overhead, the NCAS will add both overhead values to the average cost.