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Dynamics 365 Community / Forums / Microsoft Dynamics AX (Archived) / Backflush Costing
Microsoft Dynamics AX (Archived)

Backflush Costing

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Posted on by Community Member

Hi all,

Is there anyone can explain about backflush costing functionality in AX?

Basicly in the end of production process, I need to allocate all variance cost which occured in my Financial Dimension between standard cost and actual cost into whether inventory of Semi Finished Goods, Finish Goods, or COGS.

Are these functionality can be accommodated with backflush costing.

Sorry if my question too general, because I found only little information about this function in training material.

Thanks in Advance,

M.H.

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  • Tim Schofield Profile Picture
    Tim Schofield on at

    If your item is a standard cost item, the system will use the accounts on the Item's posting profile to post the variance between the production order cost and the item's standard cost. Those postings should include the Financial dimensions from the production order, which are inherited from the item. The variance is calculated as the cost of all of the inputs to the production order (posted picking list journals; posted route card journals; and overheads as applied by the costing sheet) - the item's standard cost. You'll see those postings when you End the production order and not before.

    Hope this helps.

  • Community Member Profile Picture
    Community Member on at

    Hi Tim,

    Actually after I try to create Production Order and then try to post it from "Estimate" to "End", I found some confussion on the journal posting.

    So basically my total product amount (BOM) is rolled up from total cost item from pick journal + routes, isn't it?

    First I would like to confrim my understanding.

    My assumption for the process should be:

    1. Issue component/raw material which will credited inventory and debited cost of raw material in my financial dimension of production process.

    2. my route component which will move cost with standard rate from resources financial demension to my production financial dimension. (so this one should be cost of production debit in production financial dimension and credit with resource financial dimension).

    3. Once it finished, journal will post total cost of production in credit with production process financial dimension and debit my Finished goods (inventory).

    My question is, when I try to post route journal/card, the journal will be debit and credit to the resource financial dimension. Which will not add any value on my production process.

    Is this process has been correct? or it shoul be others.

    M.H.

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