It is, but you need to carefuly setup the process in order for it to happen.. 

On product:
1. Costing method : Average price,
2. Invenotry valuation : Realtime (automated
3. you need to define suppliers and suppliers prices,

Purchase pricelist:
base your purchase price calculation on Prices from supplier form

Configuration > Purchase
1. Use 'Real Price' or 'Average' costing methods.
2. Manage different pricelists

#not neccesary but also can make a difference
Enable landed cost calculation, because it also modifies purchase price -> avergae price

All this combined... and it will give you average price.. .

It works ok for one warehouse, and it is a great iomproovment compared to v7, but still faar from perfect inventory valuation,
Because you can't have different valuation for same product on different warehouses, ( average price may vary fro Wh to Wh dependinh on landed cost - transport between WH and WH locations.. ) 


Hope this helps.. 
 

Ok, it is calculating average cost, I verified.  Its just that if I enter a PO and receive those products in:

Purchasing > Receive Products > Receive Products ... it doesnt update the unit cost.  It only updates the qty.

if I receive those new products via:

Warehouse > Products Moves > Receive Products ... it doesnt update the unit cost.  It only updates the qty.

It only works if I receive those products via:

Purchasing > Receive Products > Incoming Shipments

#1  Why is that?

As for the prices, I learned how to make a Sales Pricelist and configured the price rule as based on Cost Price for Price Computation and I made it 20% markup.  It seems to work because whenever a client to which that Pricelist is assigned, gets quoted for a product, the sales price shows up as 20% over cost.  Is this the right way to handle this?  

This is what I wanted but I have a usability question:

#2  This means I have to go and reset the sales pricelists for all the customers I have already set up?  Or should I update the PublicPricelist for this computation method?  And if I should update the PublicPricelist, will that change the invoices that I have already created in the past which didnt use that 20% markup over cost rule?

Thanks!