In the admin dashboard, under orders page we can see the profits calculation. I'm just wondering if the profit calculation maintains history of product cost.
If i understand this correctly the productcost is substracted from the unit selling price and other deductions. Remaining amount is considered as profit.
Suppose on Jan 10 2017 for Product A, the product cost is $ 20, the selling price is 25$, assuming no other charges to deduct, the profit is 5$ per sale. On that day lets say, 3 units are sold.
The overall profit for all sales on will be shown as 15$.
For the same product on Jan 11 2017, the product cost is changed to $25, the selling price is set to $35, assuming no other charges to deduct, the profit is 10$ per sale. On that day lets say 1 unit is sold.
The profit should be shown as 15$ + 10$ = 25$ (15$ for 3 orders on jan 10, 10$ for 1 order on jan 11 - for the same product) and not $30 + $10 = $40 (3 orders on jan 10, 1 order on jan 1).
Is this how it is working?
This is because, if product cost history is not maintained, then profits shown will be wrong as they would have been calculated based on the latest value of the product cost for the item in the old orders and the store owner might have fulfilled the order by acquiring the item at a different price at the time of processing the old orders compared to processing the same item in the latest orders.
Can someone please clarify.