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Dynamics 365 Community / Forums / Microsoft Dynamics GP (Archived) / Zero dollar standard c...
Microsoft Dynamics GP (Archived)

Zero dollar standard cost after inventory adjustment (FIFO Perpetual) and huge cost variance applied to ledger, why did this happen and how can we correct?

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Posted on by M Daubs 20

We recently posted a relatively large inventory adjustment batch that resulted in a huge system-generated cost variance.  While looking for the reason for this variance we discovered that about 100 inventory items now have a zero dollar standard cost yet there is no cost history to support this.  The variance applied by the system has thrown the GL balance of our inventory account off by about 30% and we aren't sure how to fix the problem.  We spoke to several GP partners and the best guess we got was that it was something related to items that once had a negative quantity.  We are not using the manufacturing module and all of the items in question are set to FIFO perpetual pricing.  Does anyone have any clue what's going on or how we might correct this?  GP 10.

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  • L Vail Profile Picture
    L Vail 65,271 on at
    Re: Zero dollar standard cost after inventory adjustment (FIFO Perpetual) and huge cost variance applied to ledger, why did this happen and how can we correct?

    I don't know if Frank had a chance to, but I e-mailed the articles. Anyway, the following is a link to the items.

    Description of the valuation methods that are available in Inventory Control in Microsoft Dynamics GP:

    mbs2.microsoft.com/.../KBDisplay_Print.aspx

    Inventory Costing in Microsoft Dynamics GP 9.0 and 10.0 (White Paper - very good explanation):

    mbs.microsoft.com/.../wpmdgp_inventorycosting_90_10.htm valuation

  • Community Member Profile Picture
    Community Member Microsoft Employee on at
    Re: Zero dollar standard cost after inventory adjustment (FIFO Perpetual) and huge cost variance applied to ledger, why did this happen and how can we correct?

    Hi Frank,

    Are you able to send me a copy of this PDF document or point me in the direction on PartnerSource?

    Regards

    Geoff James

    geoff.james@praxa.com.au

  • Suggested answer
    Frank Hamelly | MVP, MCP, CSA Profile Picture
    Frank Hamelly | MVP... 46,317 Super User 2025 Season 1 on at
    Re: Zero dollar standard cost after inventory adjustment (FIFO Perpetual) and huge cost variance applied to ledger, why did this happen and how can we correct?

    It's not easy to troubleshoot something like this without access to the data but if you shoot me an email I'll send you a PDF document that explains how inventory valuation works in GP.  This applies to GP9 and forward.  It goes into the valuation calculations in great detail and may help you figure out what's causing the variance.

    Hope this helps,

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