Standard Cost+Overhead Rate

sneha
sneha Member Posts: 191
edited 2010-05-05 in NAV/Navision Classic Client
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)?

Comments

  • kapil4dynamics
    kapil4dynamics Member Posts: 591
    No this 10 would be treated as variance.
    Kapil Khanna
  • sneha
    sneha Member Posts: 191
    If I am correct, Variance transaction occurs at purchase side, my question is at the time of sales
  • kapil4dynamics
    kapil4dynamics Member Posts: 591
    sneha wrote:
    If I am correct, Variance transaction occurs at purchase side, my question is at the time of sales

    True :oops:
    Kapil Khanna
  • Kowa
    Kowa Member Posts: 926
    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)".
    Kai Kowalewski
  • sneha
    sneha Member Posts: 191
    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
    Kowa Member Posts: 926
    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.
    Kai Kowalewski
  • sneha
    sneha Member Posts: 191
    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
    Joe13 Member Posts: 8
    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?

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