Updating Standard Cost

[Former Member]

Hi Everyone,

Is there anyway or any reason that the standard cost defined in the Item Master would be updated by the system? I have a customer who claims that the standard cost for one of their items has somehow been changed and they believe the system somehow made this change. The item is set up only as a Purchased Item.

I have gone into the Change Log for the item and printed off the Differences window for him because it appears that he changed it (he had changed the valuation method from Standard to FIFO and back to Standard). He claims that he did not enter the standard cost, however. I have tried to duplicate the changes he made in a Test Database to see if there is anyway to get the system to generate a change in the standard cost, and I haven't been able to do so.

It would be nice if I could send him copies of the Item Master Data - History Instances screens, but unfortunately the history screens show all of the valuation methods as Moving Average even though the Differences screen shows the valuation method going from Moving Average to Standard to FIFO and back to Standard.

Can anybody please either confirm my thoughts on the standard cost or explain how the system is changing the item cost and what method it is using to calculate the new cost?

I appreciate your help in advance.

Thank you,

Amanda

[Former Member · Accepted solution]

Hi Amanda,

You can simply tell your customer, "to change the valuation method from Standard to FIFO and back to Standard" will dramatically impact system. It should be avoided at their greatest effort. In the case it already became history, they have to allow system to calculate whatever system has to be consistent with its own view.

The "Inventory Valuation Report" under Inventory Reports can give them all answers for the detailed item value change history.

Thanks,

Gordon

[Former Member · Accepted solution]

Hi Gordon,

Thank you for your quick response.

However, they cannot run an Inventory Valuation Report because the item is not flagged as an inventory item. It is only flagged as a Purchased Item. That's why I thought there may be some peice I'm missing becuase I've generally only dealt with inventory items. I thought maybe the system handled non-inventory items differently.

Thank you for your help.

Amanda

[Former Member · Accepted solution]

Hi Amanda,

You are right. System must handled non-inventory items differently. However, the valuation method impact may not stop at inventory items. System has to be consistent with its own logic.

I am wondering what kind of item they just purchase without put it into inventory.

Thanks,

Gordon

[Former Member · Accepted solution]

Hi Gordon,

Our customer is a beverage distributor and the item that is only a purchased item is a packaging fee. They are charged a purchasing fee from some of their suppliers. This obviously isn't an inventory item but they want to be able to track the packaging fees they incur.

Thanks,

Amanda

[Former Member · Accepted solution]

A system report under Purchasing - A/P -Purchasing Report - Purchase Analysis by Item might be used to find the reason.

You need to check Secondary Selection on item tab to narrow the selection.

Thanks,

Gordon

[JesperB1 · Accepted solution]

Hi Amanda,

A few points:

- The system does not change this price on it's own.

- Even if this was a Moving Average item it would not be updated by the system as this is not an Inventory item. FIFO and Moving Average are calculated prices, since no calculation is done it is an definition without meaning.

- For non inventory Items (like the item you are describing) no item cost is ever calculated.

- The price (when we are talking about a non inventory item) can be changed at any time.

- The only method that makes sense for a non stock item is standard.

- The standard price for these items to my knowledge would only be used as a cost price when this item is component in production bill of material and as a base price in gross profit calculation (this only works in 2007). (there might be other usage for it, but I wouldn't know of them)

I hope this information helps.

Jesper

[Former Member · Accepted solution]

Hi Jesper,

Yes, your reply helps greatly. I didn't believe there was any way that the system would be able to update the standard cost on it's own but wanted to verify my thoughts in case I was overlooking something.

I appreciate your help.

Thank you,

Amanda