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Finance | Project Operations, Human Resources, ...
Suggested Answer

BOM Calcualtion returns with zero cost

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Posted on by 32

Hi, as attached image when calculate BOM standard cost for purchased raw material included in BOM, the calculation returns with zero cost for all purchased raw material items and also the produced manufacturing item.

When review the inventory on-hand for each purchased raw material items there is a cost price for each item related to purchased orders where we use weighted average inventory policy.

When review the manufactured produced item in inventory on-hand it has a cost price coming from production orders with using a weighted average inventory policy.

When review the manufacturing produced item in Cost Calculator in view ribbon in production order, it gives the correct standard cost including overheads and in-direct costs related to cost sheet.

So, Please may help about BOM calculations?  

BOM_5F00_Calculation.png

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  • Suggested answer
    Ludwig Reinhard Profile Picture
    Microsoft Employee on at
    RE: BOM Calcualtion returns with zero cost

    Hello Mostafa,

    You mentioned something about standard costs and weighted average costs.

    Is the item that you produce a standard cost item and does it have an active cost price in a standard costing version?

    What about the raw materials that are used when producing this finished product? Are they also standard cost items and to they have an active cost price?

    Can you also check the indirect costs used in the costing sheet. Also for them it appears that no cost price in a standard costing version exists.

    Another thing that you can check out is the date of the cost price activation and the date for which the production order is run and calculated. If the production order is 'backdated' or calculated on a day before the cost prices were active then you might see such an outcome.

    Best regards,

    Ludwig

  • Mostafa Tarabay Profile Picture
    32 on at
    RE: BOM Calcualtion returns with zero cost

    Thanks Ludwig Reinhard,

    All the produced items and purchased raw materials items are standard cost.

    But i am confused about "active cost price" for produced and raw material items. Is that mean should i need to create a cost version for all produced and raw material items? i think produced items take active cost from production orders and raw materials items takes active cost from purchase orders, or not?

    Please if you can give more clarify.

  • Suggested answer
    Ludwig Reinhard Profile Picture
    Microsoft Employee on at
    RE: BOM Calcualtion returns with zero cost

    Hello Mostafa,

    If all of your items are standard cost items then you need a standard cost costing version and activate the standard cost prices for them.

    At the time the production is running and eventually finished the actual costs are compared against those standard costs and the difference is recorded as one of the variances that is responsible for the cost difference.

    Best regards,

    Ludwig

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