Unit Cost on Sales Order (and/or Unit Cost on Item Master)

knm

I have one question.

When creating Sales Order, "why" does NAV 2009 SP1 (or NAV in general) inserts the "Average Unit Cost" into the Unit Cost field?

There must be some specific reason behind this, but I don't understand why it does not use the any one of the following costs.
1) Use the Latest Cost
2) Update Unit Cost depending on Item's Costing Method.
Ex) If FIFO, then use the Unit Cost from the oldest available inventory.

Is there any setups in NAV that allows me to achieve any of the above?

Thank you.

themave

Not that I have found, we are an end user company, and we use Standard cost, yet the system would bring in the average cost, we had to pay our solution center to code it to bring in the standard cost, same for PO's

Alex_Chow

It uses the Unit Cost because that's the (arguably) closest to the real cost when the order is created at the time of entry.

When the order is posted and the adjust cost is ran, it'll adjust the cost based on the costing method setup for the item. Using the unit cost will make the amount that needs to be adjusted (arguably) smaller.

themave

Alex Chow wrote:

It uses the Unit Cost because that's the (arguably) closest to the real cost when the order is created at the time of entry.

When the order is posted and the adjust cost is ran, it'll adjust the cost based on the costing method setup for the item. Using the unit cost will make the amount that needs to be adjusted (arguably) smaller.

Yes, but if you are using a standard costing method, your cost should be the standard cost, not what it was paid for prior, or an average, that is the diffenition of standard cost.

If you end up buying it for a different price then standard, then Navision books the differnce between standard and actual cost paid to the variance accounts. it should always assume you are buying it at standard cost, and certainly sell at standard cost, since when you run the adjust cost routine, the inventory is adjusted to the standard cost that the item was brought into inventory at. It will never book it into inventory at the average cost.

So no matter what the cost paid was, it should default on a sales order is the standard cost. Since that is the cost it will always be adjusted to when it was purchased.

Alex_Chow

That is true. However, it is possible that the standard cost will be changed between the time the item is purchased and sold and when you run the adjust cost.

Again, it's possible, may not be probable.

themave

Alex Chow wrote:

That is true. However, it is possible that the standard cost will be changed between the time the item is purchased and sold and when you run the adjust cost.

Again, it's possible, may not be probable.

Correct you are, and I wish there was a routine that could populate the revaluation journal to adjust items after you change the standard cost. It doesn't seem to hard to do, a processing only report could probably do it. But the revaluation journal has it's own issues, in that it wants to post the revaluation entries in the period of the original entry, even if that period is closed, instead of the period in which the adjustment is made.

Alex_Chow

Yes... But that's a whole separate topic...

NAV is a product that's created to fit "horizontally". Whether you agree with their version of "horizontal" is another separate topic.