Specific Costing Setup

Follow these steps to implement the Specific inventory cost method:

  1. Select the Post to Journal field on the Inventory Parameters form to have all transactions which affect inventory post to the G/L inventory distribution journals. Clear the field to suppress posting to the G/L those transactions which may affect inventory.
  2. Set the Cost Method field on the Items - General tab to Specific for all items. (Ideally, you will set this field at the time the items are added to the Items file).
  3. Set the Cost Type field on the Items - General tab to Actual. The cost type default value comes from the Cost Type field on the Inventory Parameters form when adding new items.
  4. Enter the beginning inventory, along with the initial Specific unit cost, for each item's location/lot.

NOTE: When processing an ADD transaction on the Item Stockroom Location form to enter stock locations and accompanying beginning inventory balances, enter the cost to be associated with the item's quantity entered. This cost is also posted to the Unit Cost field in the Items file.

If you have selected Actual in the Inventory Parameter's Cost Type field, and selected the Post to Journal check box in General Parameters to indicate that the manufacturing modules are to post inventory transactions to G/L Inventory Distribution Journals, you must also set up the G/L account numbers that the system uses for this interface. The following account numbers need to be entered into the associated codes and parameters for costing purposes:

Product Codes - WIP Tab

WIP Material

WIP Labor

WIP Fixed Overhead

WIP Variable Overhead

WIP Outside Services

Product Codes - Misc Tab

Inventory Adjustment

Product Codes - Applied Overhead

Only one account is needed for the each following:

Matl Fovhd Applied

Matl Vvhd Applied

NOTE: The Fixed Material Overhead Applied and the Variable Material Overhead Applied accounts are required only when overhead is based on Job Material Issues.

Purchasing Parameters

Vouchers Payable

Related Topics

Costing Overview

About the Specific Costing Method