The items with costing method as standard cost have to have their first transaction as inventory cost revaluation. In other cases, an error will occur as: “Inventory Revaluation is no longer the first transaction in the item’s history”
In order to not get this error, all the items with standard costing method should be revaluated. There are three main steps for the standard cost revaluation.
- Creating standard cost version
- Planned standard cost record.
- Inventory Revaluation.
Standard Cost Version: This is a record with a cost version name, inventory standard cost field (with options item default, last purchase price, average cost). This record is helpful in determining the inventory standard cost method, ie, from item default or last price or average cost. The item default means, for the inventory items, we can provide default cost for each location. and for the assembly items, if the supply type is ‘Purchase’, we can provide the default cost for each location.
Navigation: List-> Accounting-> Standard Cost Version-> New
Planned standard cost: This record can be processed in bulk or manually. The bulk planned standard cost records can be generated using the planned standard cost rollup page in list-> Accounting-> Planned standard cost rollup. The standard cost version is to be selected. The effective date is important beacuse, this is the date you want the new standard cost to take effect. The checkbox Update Inventory Cost will update or create the planned standard cost records of the inventory items based on the cost version.
In the planned standard cost record, when creating manually the item components and its cost are to be given in the line level along with other details. Navigation List->Accounting-> Planned Standard Cost-> New
Inventory cost revaluation: This record will assign the standard cost for the item with the costing method as standard cost. This can be done in bulk as well as manually. Bulk revaluation process navigation: List->Accounting-> Revalue Standard Cost Inventory.
The manual creation of the record is from the navigation: Transactions-> Inventory-> Revalue Inventory cost-> New
An account to reflect this transaction is to be selected.
Note: For the components with costing method as standard cost, the unit cost calculated by the system is its current standard cost.