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Gabriel Camarena
Gabriel
 10
Updating Standard Costs for Inventory Items
1246
5
00
Posted: Jul 17, 2018   
Votes
Phill Norrey
Phill
 1348
Replied 

Finance shouls ALWAYS we responsible for standard cost.  Your responsibility would be for the current cost.   Check the settings in 3.24 to see how the current cost is being maintained.

BTW, you cannot seperate purchase parts from other parts when doing a standard cost roll.  By that I mean if they give you permission to update standard then you could do it for any part.

In most companies you would then use the current cost data to allow finance to set the standard for the following year.

10
Replied: Jul 18, 2018
Votes
Gabriel Camarena
Gabriel
 10
Replied 

That is what I thought, unfortunetly the person that normally updated the STD Costs left the company, and it seems that there is no clear idea on how he updated it, can you please provide a step by step on how the standard cost for purchased items should be updated?

Thank You.

00
Replied: Jul 18, 2018
Votes
Phill Norrey
Phill
 1348
Replied 

There really is no standard way to do the update as each company would develop their own methodology.

But you might want to do the following.

Create a new cost set called say "STD2018".

Create another one called say STD18TST.

NOTE:  If you have frozen costs you will need to unfreeze them

copy your standard costs to both costsets You will keep STD2018 as a back up so you can always use this data to restore if needed.

If you are going to use the current cost as your new standard then copy the current cost to STD18TST for just PURCHASED ITEMS.

Then run a full cost roll to update all the higher level items for costset STD18TST.

You can then compare STANDARD to STD18TST to see what impact the change would have.  If you are happy then copy STD18STD to Standard.

Again.  As I said this may not be the right way for your organization but it is a start

 

00
Replied: Jul 18, 2018
Votes
Martin Wright
Martin
 191
Replied 
Process outlined by Phill is reasonable. Just be careful about timing. Most people update costs at period end, but be careful that transactions for the old period are all completed and transactions for the new period may need to be held to avoid mix up of old & new standards. GL entries for revaluation are created as soon as you update the standard for an item, and they use the current date. This is why you should create another cost set and then copy it across when appropriate.
00
Replied: Jul 19, 2018
Votes
John Ruch
John
 67
Replied 
Setting standard cost for the following year involves some inight into where prices are heading based on supplier notifications, understanding which recent prices were annomolies, and what volume discounts are most likely based on expected volume. For those reasons, Purchasing has taken the lead on standard cost maintenance for purchased items in our company, with Accounting monitoring variances and requesting updates when significant changes occur. New items are manually entered, and annual mass updates are loaded via cim.
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Replied: Jul 19, 2018
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