The system processes that receive an item into inventory are the following:
Physical Inventory Posting
NOTE: The Standard Unit Cost field is never updated automatically by the system. All quantities go into the Inventory module at the Standard cost of the item.
If the receipt is from purchasing, the Current Unit Cost field is updated if the Purchasing Parameters form's Update Current Cost field is "Average" or "Last."
The value of inventory is increased no matter which of the above functions is executed. A transaction is posted to the Inventory Ledger Distribution Journal when one of these functions is executed.
The transaction increases the appropriate inventory account using the item's Standard cost. Any variance from Standard cost posts to one of the variance accounts in the Product Codes form.
If you use Standard costing system-wide, but have entered Average, LIFO, FIFO, or Specific costing at the Items level for the item, the system creates or maintains the appropriate information needed for whichever cost method is being used.
This cost information is used only for job costing.
The system processes that issue an item out of inventory are:
Physical Inventory Posting
The cost at which a material is issued to a job depends upon the cost method you enter on the Items form:
Customer order shipments, purchase order returns, and stock adjustments are always processed at the item's Standard cost.
No matter which Items cost method is used, the transaction posted to the Inventory Ledger Distribution Journal uses the item's Standard cost. The only variance posted from any of the inventory reducing functions occurs when an item is issued to a job and the quantity issued is more or less than the standard quantity of the material required for that job.
All of the following reports use the Standard unit cost of the item, regardless of the value in the Items form's Cost Method field: