web
You’re offline. This is a read only version of the page.
close
Skip to main content

Notifications

Announcements

No record found.

News and Announcements icon
Community site session details

Community site session details

Session Id :
Dynamics 365 Community / Forums / Microsoft Dynamics NAV (Archived) / Actual costing in manu...
Microsoft Dynamics NAV (Archived)

Actual costing in manufacturing

(0) ShareShare
ReportReport
Posted on by Community Member

Hi,

a client wants to use actual costing for manufacturing, with average method when cogs is calculated.

I can't use average method since scrap (material variance) is not registered on average. Which costing method should I use?

*This post is locked for comments

I have the same question (0)
  • Suggested answer
    Community Member Profile Picture
    Community Member on at

    If you want to get the accurate costing by Production Order and related components, use FIFO costing method.

    This would give you actual cost (COGS) for the components being used in individual production order.

  • Suggested answer
    Alexander Ermakov Profile Picture
    Alexander Ermakov 28,096 on at

    I also recommend to use FIFO. In general, much easier to analyze cost transactions.

  • Community Member Profile Picture
    Community Member on at

    I have two problem with fifo:

    - material variance is not posted when i register scrap on production journal

    - COGS is not average as they want

    :( Any ideas?

  • Suggested answer
    Community Member Profile Picture
    Community Member on at

    if you want COGS to be posted with Average method, you have no choice but to use Average Costing Method.

    Regarding Material Variance on scrap, can you give one example on your requirement, so that we can understand further.

    unless you use standard costing method, system would not pass the variance entries.

    And you can not have two costing method attached for same item on two different scenarios. I mean for COGS and Scrap posting.

  • Community Member Profile Picture
    Community Member on at

    My only problem with average is how to register scrap? if i put it on production journal  as a consumption it will become part of my output value. Maybe item journal?

  • Verified answer
    Community Member Profile Picture
    Community Member on at

    Yes, you can use Item Journal to register the Scrap, which would not affect your production cost and further COGS.  You can choose different Gen. Prod. Posting Group, which would post the scrap value in different G/L Account. Otherwise it would go as part of Inventory Adjustment account, which should have further concern in the future.

    Ideally, Scrap should be part of Production Cost only.

Under review

Thank you for your reply! To ensure a great experience for everyone, your content is awaiting approval by our Community Managers. Please check back later.

Helpful resources

Quick Links

Responsible AI policies

As AI tools become more common, we’re introducing a Responsible AI Use…

Neeraj Kumar – Community Spotlight

We are honored to recognize Neeraj Kumar as our Community Spotlight honoree for…

Congratulations to the November Top 10 Community Leaders!

These are the community rock stars!

Leaderboard > 🔒一 Microsoft Dynamics NAV (Archived)

Last 30 days Overall leaderboard

Featured topics

Product updates

Dynamics 365 release plans