Standard costing / valuation in Microsoft Dynamics 365 Finance and Operations one version

In this blog, would elaborate standard costing / valuation in Microsoft Dynamics 365 Finance and Operations one version.

Standard cost

Standard costing technique in simple terms is a statistical and fixed cost approach i.e. the issues are always valued basis the active standard cost price on the item irrespective of the receipts.

The example uses an opening inventory (Quantity = 1 and Value =100$)

As standard cost does not require inventory closing to get the real cost as the cost is frozen upfront, any deviations in the input cost is posted as variances. Thus the adjustment entries are seen on the receipt type transactions.

Inventory closing for standard cost is not needed but the allocation of the variances captured must be amongst your planned task in the financial year end process.