COGS in Standard Costing Method

pratik.padia@gmail.com

Hi,

My client would like to see seperate entries / accounts for Material Cost, Capacity Cost, Overhead cost instead of a single standard Cost (that comprise total of these costs) at the time of sales.

Also, client would like to see product wise profitability - Sales, Material Cost, Overhead Cost etc. Presently, system provides Sales & COGS (Cogs is based Standard cost).

Please advise & if you need any further clarifiacton, let me know.

Best Regards,
Pratik

dugrchevy2

Did you ever find a solution to this? I am faced with the same requirement and would appreciate any information that you could provide.

kapil4dynamics

Surprising it is, why would somebody to do so. Standard costs is used primarily for fixed line of business (cost wise) or where the control over costs is very important. Having them separately itself will fail the purpose of using standard costs.

These entries will come separately if u get variance in any of these components of costs. Which i think u r aware of.

Have u asked the client the reason for this. At the time of Sale i am afraid by default u won't get the desired result.

And ur profitability will change to Sale (COGS & Variance , if any).

David_Singleton

Actually this is not an uncommon request. Its very common in the food industry. I did a few implementations of similar requirements in the UK, and a couple in the US.

The need is very real, and not all that difficult to handle in Navision. Companies need to break down COGS from revenue according to the different areas of manufacturing. To do it as a function of production is often not sufficient, since particularly in food, they often need to know the break down by what a particular customer (typically a retailer) purchased, and see this to better negotiate prices.

At the extreme end you can modify posting routines so that Value entries are broken down by the particular cost category. This could mean one Item ledger having say 7 or 8 value entries, and is a good option where the company manufactures large batches of only a few items. Where each item has a low cost, but each item ledger entry is for a large quantity or if sold by weight.

If there are many item ledger entries, then I generally prefer a buffer type table that consolidates the multiple entries in a new table, say by Customer/Item/Month so that the data is easier to handle.

You can also do it all manually using base functionality, but only if there are not lots of transactions.

kapil4dynamics

Thanx for the experience share David . Actually i never even didn't hear of that. :oops: