How to allocate landed cost to sold item

[Former Member]

Dear all,

I have question from this scenorio :

1. Created Goods receipt PO

2. Create A/R invoice to sell item

3. Create Landed cost for No.1.

1. I would like to know, is it possible to allocate landed cost of No.3. to sold item? Due to actual landed cost will come after item has been sold.

2. Can actual landed cost has been allocated to base price ( base price by item cost ) of gross profit in A/R invoice document?

Thanks in advanced.

Angnam

[Former Member]

Hi Angnam

As already advised, the cost of sold items cannot be changed and the GP on the Sales Documents will always be higher (at the lower cost). You can use the Material Revaluation to offset the costs to a G/L Account and this way absorb the extra costs, but this will only apply to the current on hand and affect new sales documents.

The best way to deal with this is to use freight charges on the GRPO and set Freight 1 as update Stock and Freight 2 as Not Update. Then add the expected (estimated cost) in freight 1 and the negative (opposite) of freight 1 in freight 2. The Freight 1 and Freight 2 values will therefore cancel each other out in the document row total, but the Freight 1 value will post to stock and the Freight 2 to the G/L account you specified under Freight Setup. This G/L Account can be called estimated landing costs and later offset when doing the material revaluation.

If you need more details on this work around please let me know.

Kind regards

Peter Juby

[former_member583013]

Angnam,

The purpose of the landed cost as you would probably know is to reflect the expenses that are incurred for getting the material to your location. The cost then get rolled into the cost of the Item when the landed cost is applied.

If the material was already sold, you could still process the landed cost but it could get applied to the remaining items in stock and not to what you already sold. This way your total COGS might be correct.

Regards

Suda

[Former Member]

Dear Angnam,

As the name suggested, landed cost is Landed. That means it is only related to your purchase. So the answer you probably know already. It is no way to add any costs after your sales. The cost had been frozen to the document at the creation time.

Thanks,

Gordon