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When is "Use estimated cost price" set to "not ticked/ticked" (in relation to when Post report as finished in ledger is ticked)?
What is the most common setting?
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It depends if you want the RAF cost posted prior to reversal to use the cost at the point of estimation or the actual which from memory is the current cost of the parent item.
Either way it is the cost used at RAF and is reversed at END.
So if your step process to end is minimal it does not matter.
If your costs of your components dont move you would probably use actual, if they fluctuate estimated, but it is down to personal choice (assuming the customer knows a choice exists!)
Yes but wondering why not just always use the estimated cost Price ?
When would this result in a wrong "costing situation"?
If you were in a standard costed environment and the components were FIFO costed your "estimate" would not post the standard cost to RAF giving you misleading information. One simple example I can think of. The rest is really down to the customer, do they want a "potential" estimate impacted by flowing invoices in a volatile price market, or post RAF and adjust later so the monthly reporting of these elements is based upon a static known and not a moving goal. Al depends what the accountant wants to see in may respects.
So if the Company only uses FIFO (or other not std. cost method) on items, then it will normal to use "ticked in use of estimated cost Price" and otherwise if any items are based on std. cost then do not "tick" ?
(I know it was not this you wrote, but just to use a different angle)
For FIFO I would recommend estimated. For standard I would recommend it is not (unless ALL items are standard and the the estimated=standard=actual). However I have seen the alternatives applied for certain customers due to the valuation they wanted to adopt for the interim RAF to END period depending upon the turn period of the sales item impacting on it being in stock for a period over a financial end.
Basically you can have a starting point, but you may have to change it :-)
Thanks
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