FIFO Setup Costs

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Posted on by Community Member Microsoft Employee

According to the documentation I've read, the 'Cost Incl. Setup' field within Manufacturing Setup works when you're on Standard Costing. We're on FIFO, how would we account for Setup Time in Item Costs?

https://docs.microsoft.com/en-us/previous-versions/dynamicsnav-2016/hh176014(v=nav.90)

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RobertasR 5,002 on at

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RE: FIFO Setup Costs

Hi Zac

as Hannes said, with FIFO method the cost will be added up in various stages, as opposed to Standard Cost that is 'rolled-up'. And because the standard cost is rolled-up, you need to specify what costs to roll-up.

When using FIFO, the cost of the output item will be made of costs of raw (consumption) material and any costs of routings. That means your setup time and cost should come as a routing with the cost assigned.

Hope that helps.

Robertas
Hannes Holst 5,767 on at

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RE: FIFO Setup Costs

Hi Zac,

In FIFO, the Unit Costs will be calculated based on the Source Document. E.g. in situations you purchase a product, the Unit Price of the Purchase Order would be used as Unit Costs in the Item Ledger Entry and corresponding postings in G/L. In this situation, you could add additional Item-related costs (e.g. "Setup Time") as a Charge Item and assign the costs individually to each purchased Item.

I'm not familar with the Manufacturing-module, but I guess you are able to enter a Unit Costs in the Production Order? This price would be used for any posting later.