Item Costing

sachinsanghavi

Hi,

I have a typical scenario for which i would like your assistance.

The client i am dealing with is a manufacturer but he also give for job working.

Now the scenario is as below:

2 Raw Material are given to the processor which he consumes and produces a new Processed Raw Material. The Invoice received from the vendor is only for the processing charges. So i case i book a purchase for the processed material i can only book the cost to the extent of the processing charges. But actually the cost of the processed raw material is the actual 2 Raw material consumed + the processing cost.

Can any one throw some light as to how this transactions and be booked in the system so that i can get proper costing of the processed raw material.

Regards,

Sachin Sanghavi.

sachinsanghavi

[-o< Do any one in the world of mibuso know it's reply? ](*,)

ufuk

Accounting rules differs from country to country but in general I can say something like that:

If a cost could be directly assign to an item it's a part of direct cost, if not (it is assigned to the item with a coefficient) then it's a indirect cost.

Indirect costs also divide into two. Like the painting cost (could be directly related to item's cost) and the cost of the painting unit (there isn't a direct relation).

In your case processing cost is an indirect cost (part of WIP account). The purchase cost is already in the COGS of item (part of Inventory account). So in the year-end cost reflection processes the cost will be calculated as sum of this 2 cost type.

At least in Turkey, the case is like that.

raj2000be

I assume this scenario is in India. I would think the best solution would be to use the sub contracting module in Navision.

Setup one of the work centers as a SubContractor and pull in the cost of the Processed Raw Material which would be Original Raw Material Cost + the Processing Charges.

The two of these costs can be pulled in using the Subcontrating module i.e. functilnality.

Rajesh

muksha

why are you not defining a new gen business posting group and inventory posting group for processed raw material. Try it and i am sure this will help you out.

hansika

edit

muksha

hansika wrote:

edit

:roll:

sachinsanghavi

Thanks everyone but i think the best is what "raj2000be" suggest. i.e. to use Sub Contracting Module.

Thanks every one.