(See the "Notes" section for the three requirements.) The primary requirement that you can eliminate is the requirement that the purchased component be fully invoiced. You can safely make this change in codeunit 22.Īfter you set the Output Completely Invoiced flag to TRUE, you can eliminate one of the three primary requirements for posting the final actual cost amount for finished goods output. In versions that are earlier than Microsoft Dynamics NAV 4.0 Service Pack 1, you can set the Output Completely Invoiced flag to TRUE on consumption entry postings if you use the standard costing method. When you have purchased component usage that has not been invoiced, you can force the consumption of this usage to be coded as invoiced if you use the standard costing method. It is also much easier to determine the cause of an error in a standard cost database than in an average cost database or in a FIFO cost database. It is much easier to repair a standard cost database than an average cost database. If data errors are based on data design, data modifications, or data input, you must fix the data in the database. An actual costing method only provides an average or layered cost that is based on historical purchase or on positive entry value.ĭata is easy to maintain and to repair in a standard cost database. These variance postings help you see and analyze costing changes and anomalies. The standard costing method produces variance postings that expose issues. You can see costing changes and anomalies if you use the standard costing method. However, the standard costing method does not require additional value entries and general ledger postings. As the amount of data increases, system performance decreases. The calculations become more resource intensive. Multiple levels of calculations are required in Manufacturing. If you use any actual costing method instead of the standard costing method, the amount of data increases. Using the standard costing method does not decrease system performance. Therefore, Microsoft Dynamics NAV creates many value entries and general ledger (G/L) entries for each output entry of the manufactured items.
Every adjustment must flow up all levels of the bill of materials (BOM). For example, in the first-in-first-out (FIFO) method, the system may adjust the cost to reflect the layered cost. Other system adjustments for the actual cost may also cause the changes.
These costs are invoiced and added to the purchase cost. These changes occur because the final invoice posting shows a cost that differs from the original receipt cost, freight, and other landed cost. However, if you use a different costing method, the actual cost may change many times. Therefore, the system does not adjust the component cost that is used for consumption in Manufacturing. If you use the standard costing method, the standard cost is known at the time of posting. Value entries do not increase in the standard costing method. Some advantages of the standard costing method are as follows: This information in this article is not accounting advice. The article describes a general recommendation that is based on historical support issues. In those countries, the standard costing method is unavailable. For example, the average costing method is required in Germany. In these countries, laws and accounting requirements prevent a business from using the standard costing method.
Some countries do not support the standard costing method. If the government accounting authorities and rules that govern the financial report for the country support the standard costing method, the standard costing method is the preferred method. This article describes some advantages of using the standard costing method instead of using one of the other costing methods in Manufacturing in Microsoft Dynamics NAV. All references to Microsoft Business Solutions-Navision or to Microsoft Navision 4.0 pertain to Microsoft Dynamics NAV. Microsoft Business Solutions-Navision 4.0 and Microsoft Navision 4.0 are now part of Microsoft Dynamics NAV 4.0. Some advantages of using the standard costing method in Manufacturing in Microsoft Dynamics NAV
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