fifo costing

nostran

hi,

i've just checked a customer,version 3.6, using fifo costing.

bought 1 item A @ $10
bought 2 item A @ $4 each
checked the average cost on the item card: $10
i ran the ajust cost
the average cost was changed to $6
sold 2 items. ran ajdust cost..
the average cost should be 4 as the costing method is Fifo.

seems to be the Fifo costing is not working in version 3.6 or am I missing something.
any suggestions most welcome

facade

nostran wrote:

am I missing something.

Youre not missing something - you are missing it all dear fellow.
Average on card has nothing to do with FIFO. Average is average.

Suggestions to you -
1. Check the term FIFO (1st in 1st out).
2. Try making FIFO transactions (buy and sell) in Navision (+ cost batch job)
3. Check your cost prices (on purchase and on sales).
4. Check the result against average.

At the end of the day when stock is zero everything should look the same, but feel different.

payosawat

From what I understand, navision will record cost of goods sold with average cost regardless of the costing method you choose.

Navision will correct the cost to FIFO when you run cost adjustment. The average cost field on item card is 'average cost' calculated automatically.

Hope this help clarify you more or less, have a nice day.

chaswin

In the example you quoted, after running the adjust cost after the sale, you would have had a sale of one item at $10 and a second entry of one item at $4. Check your inventory applications and value entries.

You should be left with one item remaining in the second bucket at $4, hence an average cost of $4.

nostran

hi chaswin,

i thought i would be left with an item with average cost of 4, but in navision 3.6, it does not seem to work that way...

one funny thing i noticed, is that if i don't run the adjust cost before selling the items, i actually end up with an average cost of zero and a unit cost of zero on my item card.

a check at the inventory valuation actually gives the following results:
qty=1, value = -2

but on navision 3.7, it seems to be working fine and at the end gives an average cost of 4.

the messed up thing is that the client works on 3.6...

cheers
[/quote]

chaswin

Navision keep on tinkering with the costing so I think we'll always have these issues. For example, the role of the unit cost in an average cost environment has totally changed from 2.6 to 3.7.

In 3.7 it seems to calculate the average cost on the fly at the time of posting and totally ignores the unit cost!

I personally think the costing system was designed by programmers and not accountants! javascript:emoticon(':D')
Very Happy

It's very good if you are an importer who has late costs coming in against a shipment. But everyone else suffers so that these guys can be happy!!

Ideally there should be an option for "Traditional costing" where the fifo and average costing is carried out the way the smaller ERP packages have always done it. (Average cost is only changed by positive adjustments, etc).

NaviTools.com

Hi,

You can find a lot about costing at Knowledge Base at PartnerSource (you find it under Support, Knowledge Base).

Search for: item costing

For good examples go to article 'Attain Inventory Valuation - Training Materials to Assist in Understanding the New Costing Functionality (874283)':

https://mbs.microsoft.com/knowledgebase ... -us;874283

First link points to PPT with examples:

https://mbs.microsoft.com/downloads/cus ... k28148.ppt

Include all hot fixes and improvements you can find (even if they are for 3.70).