In Inventory setup, my default costing method is FIFO, but in items card it is Average.

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Posted on by joshtechsolutions

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Hi Community,

in my Inventory setup, my default costing method is FIFO, but in my items card, the costing method is Average.

May I know how will system take into consideration?

Thank you!

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Dynamics 365 Business Central

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OussamaSabbouh 17,676 Super User 2026 Season 1 on at

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Hello,

The Item Card wins. The Default Costing Method in Inventory Setup is mainly the suggested default for new items, but each item can have its own Costing Method. So if Inventory Setup says FIFO but the item card says Average, that item will be costed as Average. For Average costing, BC calculates the unit cost as an average cost over the configured average cost period/type. Just be careful changing costing method after transactions exist; Microsoft generally recommends creating a new item if you need to change costing method cleanly.

Regards,
Oussama Sabbouh

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Pallavi Phade 5,742 Super User 2026 Season 1 on at

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Namaste @joshtechsolutions

System always considers costing method mentioned in Item card . If you can see default option is FIFO , so it appears in both setups and masters . IF there is other costing method , user need to mention in item card

While calculating inventory Valuation and unit cost of item . System reports filters costign method mentioned in item card for calculations

Warm Regards

Pallavi Phade

www.linkedin.com/in/pallaviphade131116

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Mansi Soni 10,178 Super User 2026 Season 1 on at

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Hello @joshtechsolutions,

System will prioritize Item card over inventory Setup, If you have defined any specific costing method on item card so system will override the setup done on Inventory Setup page.

Regards,
Mansi Soni

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CU02110650-0 10 on at

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Yi Yong 2,736 Super User 2026 Season 1 on at

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Hello,

The Costing Method is only used as the default value when you create new item.

Ultimately, it will follow the one used in item card when posting.

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AndrewThomas81 2,228 on at

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Inventory setup has the default method for the company, the item card itself controls costing, and it is perfectfly feasible to have a mixture of costing methods used.

Kind Regards

Andrew Thomas FCCA MCP
YouTube - Use Business Central
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