Dynamics Community Forum Thread Details

Valuation Method --> FIFO Periodic

Hi Joshua,

Thanks.. I have few more questions regarding this matter:

When using "FIFO Periodic" Valuation Method in GP-->

1) When Inventory Amount$ on Balance Sheet are in Actual Cost, how does GP calculate Purchase Price Variance?

2) In this case, Cost of Goods Sold $ are in Actual Cost$ (because Inventory$ are in Actual Cost ), Am I correct?

3) If so.. Sales Revenue$ are in Standard Cost while Cost of Goods Sold are in Actual Cost.. isn't it wrong?

4) Please advise how to apply "Standard Cost" in Inventory also?

We want to have "Standard Costing" in Great Plain for our operation,

Would you please advise if FIFO Periodic is the correct Valuation Method that we should choose in Item Maintenance..?

Thank you very much for your advise.

Good day

Hi Benson,

Sorry for the delayed response, but this is on a new thread. If you want to direct a question to someone specifically on the forum, please send a message to them after creating the thread. That way, you do not have to wait longer than necessary to get a response.

1) GP calculates the purchase price variance based on your purchase order (usually) and your receipted invoice from the vendor / shipper. Create PO with expected costs > vendor ships and invoices > actual price goes to AP, and variance is adjusted.

2 and 3) No, cost of goods sold are what you set on the item's standard cost when invoicing.

In GP, you set the standard cost at whatever frequency makes the most sense for your business. Usually, this might be a budgeted cost or an average over some length of time (monthly, quarterly, etc.) The variances between your inventory accounts and the cost of goods sold are journalized to the cogs variance accounts you set up in GP. This means your standard cost + your variances = your actual costs in inventory.

If this makes sense for your business needs, then you using FIFO Periodic is correct, otherwise you should consider FIFO perpetual which allows GP to handle the costs associated with the inventory sold based on the first in first out process of relieving inventory.

Quick Links