Cost calculation terminologies

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Posted on by M Saravanan

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Dear Members,

It would be really great, if you members can give an insight regarding the following terms shown when the cost calculation is done for an item in D365 finance and operations. When I am trying to calculate the cost of the item, by running the costing version, I am able to see the cost of the item, along with the following details. I am attaching the screenshot for your reference.

1. Calculation factor per unit.

2. Consumption per lot size.

3. Cost per lot size.

4. Lot size quantity.

I wish to know what does these term mean and on how/what basis it is calculated.

Please guide to know and understand these terms.

Thanks,

Saravanan

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Dynamics 365 Supply Chain Management

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sagar_patil 918 Super User 2025 Season 2 on at

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Hi,

Since I don't have the details of your BOM, I'll provide an example to give you a better perspective.

BOM as below:

BOM Details

Per series = 1, meaning for 1 kg of FG004, 1.9850 kg of RMWA03 and a similar proportion of RMWA04 are required.

Cost Calculation:

Standard cost for BOM items:

RMWA03 = 30

RMWA04 = 25

Calculation Factor per unit = Cost you defined for that item.

Consumption per lot size

For 2.5 kg of FG003, the required quantity of RMWA03 is:

2.5 × 1.9850 = 4.96 kg

(The consumption is calculated based on the BOM proportion.)

Cost per lot size

Cost per lot size = Consumption per lot size × Standard cost per unit (Calculation Factor per unit.)

For RMWA03: 4.96 × 30 = 148.80

Lot size quantity

Lot size quantity refers to the quantity for which cost is being calculated. In this example, it is 2.5 kg.

I hope this explanation is clear.

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