We are at the start of developing a kernel for AX 2012 and are trying to get clarification in whether we can post cost of sales transaction into its components, such as materials, labour, energy and overhead. Our consultants advise us that the cost of sales transaction posts in one lump sum which is then not possible to split in the way we need. This seems odd to me.
We are a typical manufacturing group who wishes to adopt FIFO inventory methodology.
Hi Adrian
As standard the cost of sale transaction is not split one posted, it is booked out as a single cost from the inventory asset account finanically.
However if you setup your item cost groups and the costing sheet to mirror your breakdown you will see this in the ProdCalcTrans (?) table based upon the production order. Unfortunately you also need an item tracking dimension to be active to really track this, i.e. serial or batch numbering. You should also be aware if the production order is ended you can delete it and this deletes the cost breakdown in the tables.
Ultimately you can report on it, but the COGS will not post to the ledgers based upon this split, the item group of the parent posts to the COGS account solely based upon the inventory cost of the item.
Have a look at the Cost breakdown field in the inventory parameters, where you select No or Sub ledger. The selection of Sub ledger is termed an active cost breakdown. An active cost breakdown is critical for calculating, retaining and viewing cost group segmentation across a multilevel product structure for standard cost items. When the cost breakdown is active, you can report and analyze inventory, work in process (WIP), and cost of goods sold (COGS) per cost group in a single level, multilevel or total format. An active cost breakdown means that activating a manufactured item’s cost will result in storing the cost group segmentation within the item’s cost record.
The selection of none for the Cost breakdown field means that cost group segmentation will not be maintained for standard cost items. That is, a manufactured item’s standard cost will be calculated and maintained as a single amount without cost group segmentation, and the cost contributions of manufactured components will be aggregated into the single amount.
Adam, a belated thanks for this reply which was very useful. 14 months later however we are still developing our core model! Maybe I can pick your brain on this related question below:
We want to adopt weighted average inventory valuation methodology for raw materials and standard costing for finished goods. When recalculating the standard costs for finished goods every month, can AX use the weighted average value for the raw materials rather than the Trade Agreement or Latest Purchase price, which currently it seems to use in our set up? If so, do you know how to set this up?