Costing Price Determination
Accurate costing price determination is crucial for production costing and inventory valuation. This guide highlights how methods like Standard, Moving Average, FIFO, and Serial Number/Batch impact cost calculations for Final Goods, Co-Products, Scrap, and back-flush operations.
The table below summarizes each method's behavior and cost update processes.
| Costing | ||||||
|---|---|---|---|---|---|---|
| Standard | Moving Average | FIFO & Serial Number/Batch | ||||
| Can Change on Pick Receipt | Description | Can Change on Pick Receipt | Description | Can Change on Pick Receipt | Description | |
| Final Good | ✔️ | Value is copied from CC000 on MOR creation. | ✔️ | Value is copied from CC000 on MOR creation. | ✔️ | Value is copied from CC000 on MOR creation. |
| Co-Product | ✔️ | Value is copied from CC000 on MOR creation. | ✔️ | Value is copied from CC000 on MOR creation. | ✔️ | Value is copied from CC000 on MOR creation. |
| Scrap | ✔️ | Value is copied from CC000 on MOR creation. | ✔️ | Value is copied from CC000 on MOR creation. | ✔️ | Value is copied from CC000 on MOR creation. |
| Co-Product (back-flush) | ✔️ (On MOR) | Value is copied from CC000 on MOR creation. | ✔️ (On MOR) | Value is copied from CC000 on MOR creation. | ✔️ (On MOR) | Value is copied from CC000 on MOR creation. |
| Scrap (back-flush) | ✔️(On MOR) | Value is copied from CC000 on MOR creation. | :heavy_check_mark (On MOR) | Value is copied from CC000 on MOR creation. | ✔️(On MOR) | Value is copied from CC000 on MOR creation. |
| Dynamic Costing | ||||||
| Standard | Moving Average | FIFO & Serial Number/Batch | ||||
| Can Change on Pick Receipt | Description | Can Change on Pick Receipt | Description | Can Change on Pick Receipt | Description | |
| Final Good | ❌ | Value is computed from all receipts and issues (standard price variances are posted). We also update price on Pick Receipt after receipt. | ❌ | Value is computed with overhead and all receipts and issues (update price on Pick after receipt). | ❌ | Value is computed with overhead and all receipts and issues (update price on Pick after receipt). |
| Co-Product | ❌ | Value is copied from CC000 on Pick Receipt creation and is updated when Goods Receipt is created directly from CC000. When quantity on Pick Receipt is changed we update price field (for informational purpose). We also update price on Pick Receipt after Goods Receipt is created. | ❌ | Value is copied from CC000 on Pick Receipt creation and is updated when Goods Receipt is created directly from CC000. When quantity on Pick Receipt is changed we update price field (for informational purpose). We also update price on Pick Receipt after Goods Receipt is created. | ❌ | Value is copied from CC000 on Pick Receipt creation and is updated when Goods Receipt is created directly from CC000. When quantity on Pick Receipt is changed we update price field (for informational purpose). We also update price on Pick Receipt after Goods Receipt is created. |
| Scrap | ❌ | Value is copied from CC000 on Pick Receipt creation and is updated when Goods Receipt is created directly from CC000. When quantity on Pick Receipt is changed we update price field (for informational purpose). We also update price on Pick Receipt after Goods Receipt is created. | ❌ | Value is copied from CC000 on Pick Receipt creation and is updated when Goods Receipt is created directly from CC000. When quantity on Pick Receipt is changed we update price field (for informational purpose). We also update price on Pick Receipt after Goods Receipt is created. | ❌ | Value is copied from CC000 on Pick Receipt creation and is updated when Goods Receipt is created directly from CC000. When quantity on Pick Receipt is changed we update price field (for informational purpose). We also update price on Pick Receipt after Goods Receipt is created. |
| Co-Product (back-flush) | ❌ | Value is copied from CC000 on Goods Receipt. | ❌ | Value is copied from CC000 on Goods Receipt. | ❌ | Value is copied from CC000 on Goods Receipt. |
| Scrap (back-flush) | ❌ | Value is copied from CC000 on Goods Receipt. | ❌ | Value is copied from CC000 on Goods Receipt. | ❌ | Value is copied from CC000 on Goods Receipt. |
| Item Costing | ||||||
| Standard | Moving Average | FIFO & Serial Number/Batch | ||||
| Can Change on Pick Receipt | Description | Can Change on Pick Receipt | Description | Can Change on Pick Receipt | Description | |
| Final Good | ❌ | Value is copied from CC000 on Pick Receipt creation and is updated when Goods Receipt is created directly from CC000. When quantity on Pick Receipt is changed we update price field (for informational purpose). We also update price on Pick Receipt after Goods Receipt is created. | ❌ | Value is copied from CC000 on Pick Receipt creation and is updated when Goods Receipt is created directly from CC000. When quantity on Pick Receipt is changed we update price field (for informational purpose). We also update price on Pick Receipt after Goods Receipt is created. | ❌ | Value is copied from CC000 on Pick Receipt creation and is updated when Goods Receipt is created directly from CC000. When quantity on Pick Receipt is changed we update price field (for informational purpose). We also update price on Pick Receipt after Goods Receipt is created. |
| Co-Product | ❌ | Value is copied from CC000 on Pick Receipt creation and is updated when Goods Receipt is created directly from CC000. When quantity on Pick Receipt is changed we update price field (for informational purpose). We also update price on Pick Receipt after Goods Receipt is created. | ❌ | Value is copied from CC000 on Pick Receipt creation and is updated when Goods Receipt is created directly from CC000. When quantity on Pick Receipt is changed we update price field (for informational purpose). We also update price on Pick Receipt after Goods Receipt is created. | ❌ | Value is copied from CC000 on Pick Receipt creation and is updated when Goods Receipt is created directly from CC000. When quantity on Pick Receipt is changed we update price field (for informational purpose). We also update price on Pick Receipt after Goods Receipt is created. |
| Scrap | ❌ | Value is copied from CC000 on Pick Receipt creation and is updated when Goods Receipt is created directly from CC000. When quantity on Pick Receipt is changed we update price field (for informational purpose). We also update price on Pick Receipt after Goods Receipt is created. | ❌ | Value is copied from CC000 on Pick Receipt creation and is updated when Goods Receipt is created directly from CC000. When quantity on Pick Receipt is changed we update price field (for informational purpose). We also update price on Pick Receipt after Goods Receipt is created. | ❌ | Value is copied from CC000 on Pick Receipt creation and is updated when Goods Receipt is created directly from CC000. When quantity on Pick Receipt is changed we update price field (for informational purpose). We also update price on Pick Receipt after Goods Receipt is created. |
| Co-Product (back-flush) | ❌ | Value is copied from CC000 on Goods Receipt. | ❌ | Value is copied from CC000on Goods Receipt. | ❌ | Value is copied from CC000on Goods Receipt. |
| Scrap (back-flush) | ❌ | Value is copied from CC000 on Goods Receipt. | ❌ | Value is copied from CC000 on Goods Receipt. | ❌ | Value is copied from CC000 on Goods Receipt. |
By understanding the nuances of costing price determination across different methods and scenarios, businesses can ensure precise cost tracking and effective inventory valuation. This alignment of processes with system functionality reduces errors, supports financial accuracy, and provides actionable insights for production and inventory management.