Standard Cost+Overhead Rate

sneha

Can someone please clear this?
Item Costing Method is Standard. Standard Cost is $100 and Overhead Rate is $10. Now when I invoice this item, what should be the cost of Sales at Standard? . Is it should be $100 (or) $110?
I posted a transaction and I got the result as $100, which is a standard cost, but can I include the over head rate also (result should be $110)?

kapil4dynamics

No this 10 would be treated as variance.

sneha

If I am correct, Variance transaction occurs at purchase side, my question is at the time of sales

kapil4dynamics

sneha wrote:

If I am correct, Variance transaction occurs at purchase side, my question is at the time of sales

True :oops:

Kowa

sneha wrote:

I posted a transaction and I got the result as $100, which is a standard cost, but can I include the over head rate also (result should be $110)?

You can revalue the positive item ledger entry that this transaction was applied to, then the COGS will increase if the cost adjustment batch is run afterwards. Just enter the item no. in the revaluation journal and fill in the "Applies-to entry" and the "unit cost (revalued)".

sneha

So, In base Navision, In Standard Costing Method, Cost of Goods Sold is equl to only Standard Cost (not Standard Cost + Overhead Rate). Correct?

Kowa

sneha wrote:

So, In base Navision, In Standard Costing Method, Cost of Goods Sold is equl to only Standard Cost (not Standard Cost + Overhead Rate). Correct?

Yes, but "Standard" is the exception. All the other costing methods will include the Overhead Rate (and/or the Indirect Cost %) in the the inventory value and COGS.

sneha

Kowa wrote:

sneha wrote:

So, In base Navision, In Standard Costing Method, Cost of Goods Sold is equl to only Standard Cost (not Standard Cost + Overhead Rate). Correct?

Yes, but "Standard" is the exception. All the other costing methods will include the Overhead Rate (and/or the Indirect Cost %) in the the inventory value and COGS.

Thank You!

Joe13

I know this is an old string, but I have a question related to Standard Costing in NAV relieving inventory at the Standard Cost and not the actual Purchase Cost.

If a line discount is applied to a standard cost item being purchased, technically you paid the discounted amount and not the standard cost amount, but when COGS is hit when selling that item it is hit for the Standard Cost...

Is this compliant with GAAP?