how can Unit Cost be zero and how to fix it?

dn

We have recently discovered that some items with costing FIFO got unit cost = 0. We have Posted Purchase Invoice and I can see we have Direct Unit Cost and Unit COst(LCY) in Purchase Inv.line but the Unit Cost didn't update on Item Card..How come??

I have run Post Inventory Cost to G/L and Adjust Cost - Item Entries but the Unit Cost for Item is still Zero in Item Card.

Any who have some idea what went wrong? And do u have any suggest how to correct it?

jannestig

Many issues could be happening

Are you using SKU's ?
have you tried working out the cost based on the value entries to see where you have 0 cost first occuring and why it changed due to + - adjustment entries etc.

You will have to do some more research and provide more information for a more concise answer

dn

hi
No, we are not using Stock Keeping Unit in this company. :-k

Kowa

Filter the value entries for this item and copy them to Excel

Sum up Item Ledger Entry Quantity
Sum up Cost Amount (Actual)" and Cost Amount (Expected)
Add the sum of Cost Amount (Actual) to Cost Amount (Expected)

Divide the result of this by the sum of Item Ledger Entry Quantity. The result
of this the Average Cost (LCY) displayed on the item card, provided the
Item Ledger Entry Quantity Sum is not 0 and the cost amount sum is not negative. If that is the case, 0 is displayed.

Stardust77

How much quantity do you have in the Inventory now? I guess your Inventory = 0. Well, in that case, your Average Cost should be zero, and your Unit Cost as well. In fact when the Item Card was updated the last time, Navision made Unit Cost = Average Cost.

If you want to see the actual Unit Cost, go to Value Entry, and look at the Unit Cost for each record. In case you have there Unit Cost = 0, then there will be a problem, but otherwise is ok.

FYI, the Post Inventory Cost to G/L does not affect in any way your cost calculation (neither Unit Cost, nor Cost Amount).

dn

Stardust77 wrote:

How much quantity do you have in the Inventory now? I guess your Inventory = 0. Well, in that case, your Average Cost should be zero, and your Unit Cost as well. In fact when the Item Card was updated the last time, Navision made Unit Cost = Average Cost.

If you want to see the actual Unit Cost, go to Value Entry, and look at the Unit Cost for each record. In case you have there Unit Cost = 0, then there will be a problem, but otherwise is ok.

FYI, the Post Inventory Cost to G/L does not affect in any way your cost calculation (neither Unit Cost, nor Cost Amount).

Yes, u are right..inventory is zero for some items and Average Cost is also zero.. I've sum up Cost Amount (Actual)" and Cost Amount (Expected) and both sums is zero.

But how do u explain that some items have zero in inventory Quantity and the sum of Cost Amount (Actual)" and Cost Amount (Expected) also is zero but Unit Cost in Item Card who > 0? And I found the last Purch.invoice for that item was from 2005 :-k ](*,)

jannestig

Because you are using fifo

The cost is assigned according to the unit cost brought in from your last purchase, so you have no unit cost as you have no inventory value.

Trying addeding in stock with costs and you will see how this applied.

You can also reading the costing whitepaper to have a full understanding and if you fully understand it ... explain it to me

dn

jannestig wrote:

Because you are using fifo

The cost is assigned according to the unit cost brought in from your last purchase, so you have no unit cost as you have no inventory value.

Trying addeding in stock with costs and you will see how this applied.

You can also reading the costing whitepaper to have a full understanding and if you fully understand it ... explain it to me

Hm.. in this case the Inventory value was zero but the Unit Cost was not zero.. Even after running adjust cost the Unit Cost didn't updated.
U mean it's ok?

jannestig

well try it in your test system to see how it works

1. Create a new Item with fifo method and cost
2. Add on inventory with adjustment or PO using this cost
3. Run adjust costs
4. Consume it until you have 0 remainder
5. run adjust costs again

Read below which is the standard help

Unit Cost Field
The Item Table


This field contains the cost per unit of this item.

The program fills in the unit cost field according to what you selected in the Costing Method field:

If you selected Standard as the costing method, the program greys this field and makes it non-editable.

If you selected a costing method other than Standard, the program uses the following calculation for the unit cost:

Unit Cost = Inventory Value of items on hand (expected cost + invoiced cost) / Quantity on Hand

If you selected the FIFO, LIFO, Specific, or Average costing method, the program updates the field when you run the Adjust Cost-Item Entries batch job.

With the costing methods other than Standard, the program will also update this field during the posting of purchase invoices if one of the following conditions is true:

The net invoiced quantity of the item changes from negative or zero to positive.

The unit cost on the item card is zero.

If one of these conditions is true, the program will update the field with the value in the Last Direct Cost field for the item.

If the item uses the costing method Average, you can click the AssistButton in this field to open the Average Cost Calc. Overview window, which shows all the source value entries that the program uses for calculating the average cost, grouped and summarized by average cost period.

Stardust77

dn wrote:

But how do u explain that some items have zero in inventory Quantity and the sum of Cost Amount (Actual)" and Cost Amount (Expected) also is zero but Unit Cost in Item Card who > 0? And I found the last Purch.invoice for that item was from 2005 :-k ](*,)

I think that there is a bug. Which version of Navison are you using?

Stardust77

I think that your problem is coming from CU 5804, UpdateUnitCost function. Please have a look at the below code, maybe it will help you clarify your issue.

IF "Costing Method" = "Costing Method"::Standard THEN
    "Unit Cost" := "Standard Cost"
  ELSE BEGIN
    IF CalledFromAdjustment THEN BEGIN
      CostCalcMgt.GetRndgSetup(GLSetup,Currency,RndgSetupRead);
      IF CalculateAverageInclExpCost(Item,AverageCost,AverageCostACY) THEN
        IF AverageCost <> 0 THEN
          "Unit Cost" := ROUND(AverageCost,GLSetup."Unit-Amount Rounding Precision");
    END ELSE BEGIN
      IF ("Unit Cost" = 0) AND (InvoicedQty > 0) AND (LastDirectCost <> 0) THEN BEGIN
        CALCFIELDS("Net Invoiced Qty.");
        IF ("Net Invoiced Qty." > 0) AND ("Net Invoiced Qty." <= InvoicedQty) THEN
          "Unit Cost" := LastDirectCost;
       END;
    END;
  END;

dn

Stardust77 wrote:

dn wrote:

But how do u explain that some items have zero in inventory Quantity and the sum of Cost Amount (Actual)" and Cost Amount (Expected) also is zero but Unit Cost in Item Card who > 0? And I found the last Purch.invoice for that item was from 2005 :-k ](*,)

I think that there is a bug. Which version of Navison are you using?

We are using Navision 4.0 SP1...
Is it a bug?? :shock:..IF yes..Is there any fix?

Kowa

dn wrote:

Is it a bug?? :shock:..IF yes..Is there any fix?

That's not a bug. The unit cost is only adjusted to the average cost if it isn't 0, otherwise it will show the last average cost. The reason for this is that if a return order or phys. inventory positive adjustment is created for the item, you will need a reasonable assumed unit cost even if the inventory is 0.

The function UpdateUnitCost in Codeunit 5804 is responsible for this:

    IF CalledFromAdjustment THEN BEGIN
      CostCalcMgt.GetRndgSetup(GLSetup,Currency,RndgSetupRead);
      IF CalculateAverageCost(Item,AverageCost,AverageCostACY) THEN
        IF AverageCost <> 0 THEN
          "Unit Cost" := ROUND(AverageCost,GLSetup."Unit-Amount Rounding Precision");