Std costing/WAVG costing

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Posted on by Sahar Saqeb User Group Leader

Hi,

Can someone please help me understand how AX revaluates item cost when standard cost/or Weighted average is used? i.e. what exactly happens in the background once an inventory close/recalc is run?

I understand what happens when DWAVG or FIFO is used but I dont really understand what happens when standard cost or weighted average is used. Can someone please assist?

thanks, Sahar

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RE: Std costing/WAVG costing

Hi Sahar,

Inventory closing is a process to arrive at the actual COGS of issued item quantity. This actual COGS make sure accurate profit is calculated and reported.

Standard cost features:

•No closing (no settlements)

•No marking

•Has Variances

Weighted Average cost features:

•Allows Marking and hence actual cost transfer

•Closing reflects true profitability

•Needs closing (Issues and Receipts undergo settlement)

Regards

Rahul Mohta

Independent Advisor for Microsoft Dynamics AX

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