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Dynamics 365 Community / Forums / Small and medium business | Business Central, N... / What is the difference...
Small and medium business | Business Central, N...
Answered

What is the difference between Standard Cost, Unit Cost, Indirect Cost, Last Direct Cost and Direct Unit Cost Excl. GST in Navision 2018?

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Posted on by joshtechsolutions 4,971

Hi,

In Items Costing I saw this 4 different costing, may I know what are the difference and how each of these derive their costing amount?

pastedimage1629524538396v2.png

For Direct Unit Cost Excl. GST, I have gotten this from the Purchase Order column, may I know how does it derives its amount?

pastedimage1629524486954v1.png

Thank you!

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  • Verified answer
    Community Member Profile Picture
    Community Member on at

    Josh,

    Costing Method - Select the way that the item's cost flow is managed. The most common method is FIFO, which means First-in-First-out. With this method, the items that were
    purchased first are always sold first. The FIFO costing method values the inventory decrease by using the value of the first inventory increase. The costing method
    determines how costs are calculated and how inventory is valued.
    Cost is adjusted - This status field indicates if the item's unit cost is adjusted for differing unit costs between inbound and outbound item transactions over time.
    Cost is Posted to G/L - This status field relates to the concept of cost reconciliation.
    Standard Cost - This field shows the calculated item cost if you are using standard costing method.
    Unit Cost - When creating a new item, enter the cost for each unit that you expect to pay for the item. Later, the program updates the field so it contains the item's current
    (possibly adjusted) cost. This field always reflects the most recent direct unit cost of the item on inbound transactions and related outbound transactions.
    Overhead Rate - Enter an amount to cover the indirect costs for the item.
    Indirect Cost % - Enter a percentage that corresponds to the indirect costs (freight and warehouse handling, for example) associated with the purchase of the item.
    Last Direct Cost - When creating a new item, enter the cost for each unit that you expect to pay for the item. The value is then automatically inserted in, for example, the Direct Unit
    Cost Excl. VAT field on a new purchase line.

    Hope this helps.

    Thanks,

    Steve

  • joshtechsolutions Profile Picture
    joshtechsolutions 4,971 on at

    Hi Steve,

    Thank you for your reply.

    You mentioned that for Last Direct Cost - When creating a new item, enter the cost for each unit that you expect to pay for the item. The value is then automatically inserted in, for example, the Direct Unit Cost Excl. VAT field on a new purchase line."

    I have a strange case not sure if you are aware why.

    Our Item price is around 2 decimal placing. i.e USD$43.56. however, in Direct Unit Cost Excl. VAT we notice it will become ie USD$43.45822, up till around 4 decimal placing. Any idea why it becomes this way? It also affected out Unit cost, which change from USD$43.56 to USD$43.45822 !

    This shouldn't have happen since our vendors and customers relies on this to make purchase. Hope you can advise.

    Thank you.

  • Verified answer
    Community Member Profile Picture
    Community Member on at

    Josh,

    Go to the General Ledger Setup and see what is set for the Unit-Amount Rounding Precision$. Mine is 3 decimal places and when I the Invoice Posts it will round to 2 decimal places.

    Thanks,

    Steve

    pastedimage1629666554619v1.png

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