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Dynamics 365 Community / Forums / Finance | Project Operations, Human Resources, ... / Inventory Costing Vers...
Finance | Project Operations, Human Resources, ...
Suggested answer

Inventory Costing Version Calculation

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Posted on by Hendo 584

Hi.  We want to use the Costing Version Calculations functionality to update standard costs for our manufactured finished product.  We have BOMs created but we do not use routing.  If we we update standard cost in Released Products > Manage costs > Item price for manufactured item the cost rolls up from the BOM/raw material fine.   If we use the costing version calculation and filter for the same product, we get a message ...

Item number (Finished Product) .. Calculating BOM > the cost price is zero,  Item number (Finished Product) .. Cost price doesn't exist.     

The raw material in the BOM version has a standard cost, and variable scrap factor.   We have checked all settings that we are aware of.   What are we missing?

Cheers. James.

  • Hendo Profile Picture
    Hendo 584 on at
    RE: Inventory Costing Version Calculation

    Hi Ludwig

    Not at this stage. However I'm sure there will be more questions in the future.

    Many thanks

    James

  • Ludwig Reinhard Profile Picture
    Ludwig Reinhard Microsoft Employee on at
    RE: Inventory Costing Version Calculation

    Hi James,

    Good to hear that this issue got resolved.

    Is there any other information/help that you need from the community?

    Best regards,

    Ludwig

  • Suggested answer
    Hendo Profile Picture
    Hendo 584 on at
    RE: Inventory Costing Version Calculation

    Hi Ludwig

    I have discovered that the default order type on most manufactured (only) product was set at "Purchase Order" when AX2012 R3 was implemented some 5 years ago.  Reason unknown.  This item information is critical for successfully rolling up costs using the costing version approach.   It all seems too obvious now but took a few hours of debugging to discover this.  

    Many thanks for your assistance with this matter.

    Regards James.

  • Suggested answer
    Ludwig Reinhard Profile Picture
    Ludwig Reinhard Microsoft Employee on at
    RE: Inventory Costing Version Calculation

    Hi James,

    What you describe sounds all good and ok.

    What AX2012 version do you operate?

    Might be related to an old bug for which we might have a hotfix available on LCS?! Maybe double check LCS first.

    Best regards,

    Ludwig

  • Hendo Profile Picture
    Hendo 584 on at
    RE: Inventory Costing Version Calculation

    Hi Ludwig.  I agree.   I've been checking each element of the costing version.

    Both the raw material item and the manufactured item are attributed with a item model group/Inventory Model of standard cost.

    Both also have a calculation group of DEF which specifies a cost model group of "Item Cost Price".

    Both also have a cost group of MAT which is a Cost group type of "Direct Materials" and variable cost behaviour.

    The costing type is standard cost

    Block changes and Block activation are both set to No.

    There is a tick on Restrict calculations in the calculation tab, which is disabled.  

    In this tab, I have the Production box ticked, and the Purchase order unticked, and the result is Zero.  If I also tick the purchase order box, the purchase price on the item is used and appears in the pending price.  Of course I don't want to use the PO.  I assume the production order box indicates that a BOM calculation is made to determine the new item cost but this is being ignored or blocked.

    Maybe I need to debug the calculation method.

    Regards. James.

  • Suggested answer
    Ludwig Reinhard Profile Picture
    Ludwig Reinhard Microsoft Employee on at
    RE: Inventory Costing Version Calculation

    Hello James,

    If things work in general, then there must be something wrong with the costing version.

    Can you check the following?

    - Is the costing type set to 'standard cost'?

    - Are the parameters 'block changes' and 'block activation' correctly set?

    - Are there some strange settings in the calculation tab of the costing version that might be responsible for this outcome?

    Best regards,

    Ludwig

  • Hendo Profile Picture
    Hendo 584 on at
    RE: Inventory Costing Version Calculation

    Hi Ludwig.  The finished product is set up for standard cost, and has a BOM associated with it.   The BOM points to a raw material item which is purchased and is also setup as a standard cost item.  This raw material has a standard cost of $2.27.  The BOM version specifies a 5% variable scrap factor and quantity of 1.3340 (conversion from kg to m).  The calculation which works OK when I use either the BOM calculation or the item calculation, is a standard cost for the manufactured item of $3.18 ($2.27 * 1.334 * 1.05).  It's just the costing version calculation method which returns the zero value ... and we have hundreds of items hence we need to use the costing version method.

    Regards. James.  

  • Suggested answer
    Ludwig Reinhard Profile Picture
    Ludwig Reinhard Microsoft Employee on at
    RE: Inventory Costing Version Calculation

    Hello James,

    If the standard cost calculation results in a $0 price then there must be something wrong with the prices of the parts that make up your standard cost item.

    Do those parts have a cost price setup?

    That's necessary, otherwise the calculation of the standard cost item will result in a $0 price.

    Best regards,

    Ludwig

  • Hendo Profile Picture
    Hendo 584 on at
    RE: Inventory Costing Version Calculation

    Hi Ludwig.  The pending price after running the standard cost calculation is zero, so I didn't activate it.  The message is shown after running the calculation in Costing Version.  There is an existing active price what was manually entered some time ago.  Regards, James.

  • Suggested answer
    Ludwig Reinhard Profile Picture
    Ludwig Reinhard Microsoft Employee on at
    RE: Inventory Costing Version Calculation

    Hello James,

    After running / completing the new standard cost calculation, have you activated the prices?

    It sounds as if this step is missing.

    Best regards,

    Ludwig

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