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Unit Cost LCY

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Posted on by LL-23121017-0

Hi,

In the Sales Line, there is a field called Unit Cost (LCY), which is non-editable.

Could you please explain how Business Central calculates this field?

It would be helpful if you could also provide examples to use as a reference.

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Dynamics 365 Business Central

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OussamaSabbouh 6,351 on at

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Hello,

Unit Cost (LCY) on the Sales Line is auto-calculated and read-only. Business Central takes the item’s cost from the Item Card (Last Direct Cost, Average, FIFO, or Standard—depending on the costing method), converts it to local currency if needed using the posting date exchange rate, and applies any indirect cost or overhead. It’s locked because it’s used for costing, margin, and G/L posting. You don’t edit it directly—only indirectly via item costs, purchases, or revaluation.

Regards,

Oussama Sabbouh

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YUN ZHU 95,729 Super User 2025 Season 2 on at

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Hi, Below are some code examples, which I hope will provide useful insights.

Thanks

ZHU

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Yi Yong 2,563 Super User 2025 Season 2 on at

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Hello,

Cost derive from purchases so you can't define a fixed cost on a sales document.

The unit cost/COGS will be recalculated based after posting the sales document.

Maybe you can share with us the reasons for need to amend it.

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Valentin Castravet 31,481 Super User 2025 Season 2 on at

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The system takes it directly from the Unit Cost field on the item card. The Unit Cost field on the item card is the average cost of the item. It is not the cost based on your costing method (FIFO, Average, etc.). Hope this helps as well - Unit Cost Fields on the Item Card in Dynamics 365 Business Central - Dynamics 365 Business Central Insights

Then when you ship/invoice the item, and the system runs Adjust Cost Item Entries, it adjusts the unit cost used to the actual unit cost based on your costing method (FIFO, Average, etc.)

Valentin Castravet
Work: Zander ERP Services
Blog: Dynamics 365 Business Central Insights
LinkedIn: www.linkedin.com/in/valentin-c-0500a247/

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Pallavi Phade 4,124 on at

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Namaste @LL-23121017-0

Unit cost Field from flow Item Card whenever item is selected in Sales lines .

Unit Cost calculation depends on costing method. This is derived once cost is adjusted.

Cost Adjustment depends on below setup.

Check Inventory Setup

If above highlighted Boolean is true, then whenever transaction is posted cost is adjusted and unit cost is updated in item card.

Formula for unit cost

Unit Cost (LCY) = (Direct Unit Cost – (Discount Amount / Quantity)) x (1 + Indirect Cost % / 100) + Overhead Rate

Please find the below link for unit cost

About unit cost calculation - Business Central | Microsoft Learn

Warm Regards

Pallavi Phade

www.linkedin.com/in/pallaviphade131116

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Sumit Singh 10,273 on at

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Hi,

Official references

Microsoft documentation on Unit Cost Calculation (Item Card and lines):
About unit cost calculation – Business Central [learn.microsoft.com]

Expert blog by Cynthia Priebe confirming Sales Line snapshot behavior:
Is Unit Cost on Sales Line using FIFO? [cynthiapriebe.com]

Example 1: Standard costing

Item standard cost = ₹100.

Sales Line Unit Cost (LCY) = ₹100 (copied directly).

COGS on posting = ₹100.

Example 2: Average costing

You have 10 units @ ₹90 (existing stock).

You purchase 5 units @ ₹110 → new average =
[ (10×90 + 5×110) ÷ (10 + 5) = ₹96.67 ]

You create a sales line: Unit Cost = ₹96.67 (copies current average).

On posting, COGS = ₹96.67 per unit (or adjusted if split across layers).

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Khushbu Rajvi. 20,603 Super User 2025 Season 2 on at

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Hope this helps too: https://learn.microsoft.com/en-us/dynamics365/business-central/finance-about-calculating-unit-cost

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