I have a new item that we created last week with a FIFO item model group. We created a couple of purchase orders and received and invoiced them and they show in inventory with a cost of $1.75 each. We create a BOM that has this new item as one of the components and set the BOM to use one each for every BOM item produced. I created a BOM journal for the new BOM and all the other lines of the BOM show a cost for those items. The new item does not show a cost in the BOM. There is a cost in inventory.
What did we do wrong in creating this item that no cost shows on the BOM journal or is there something else that needs to be done?
The item will have a calculation group, how is this configured? How is your costing version configured when it was picked on the BOM calculations? I presume the line on the BOM has a quantity and the calculation flag ticked?
Sorry for not responding sooner as I was away for the beginning of the week. The calculation group for this item is setup with a cost price model of Item cost price and the alternate cost price model of Item purchase price. The sales price model is Cost group. The Cost group has a cost group type of Direct materials and a behavior of Variable cost.
The BOM line does have a quantity and the calculation flag is set.
Since we need to cost of the item to reflect the purchased cost, should the cost price model on the calculation group be Item purchase price instead?
Thanks for your reply,
If the component has no quantity then the cost is always 0 because there is nothing in the BOM. Why do you have a 0 BOM line quantity but expect a cost for the component in the calculation?
If you put a quantity and want the BOM cost to be on the purchase not the item cost then yes the item cost price should be item purchase price.
BOM line does have a quantity as well as the calculation flag set. The quantity is 1 per 1 produced and the cost should be $.04 each.
Sorry I misread that!
So can you tell me where the $0.4 cost currently is on the released product?
Can you tell me the costing version settings in use when you do the calculation? Fallback principle etc.
The $0.4 cost is on the inventory cost price of the item screen. The cost price model is Version cost price. The purchase price model is Item purchase price. the fallback principle is Active and the fallback costing version is blank. Profit setting is at Standard and explosion mode is Single level. The production, purchase order and restrict calculation check boxes are checked.
If the inventory cost if $0.4 and the cost price model is cost price it will pick it up - if you are costing by site check these are the same from the onhand and where you are generating the cost from. Other than that it will flow through. I guess you are picking up the cost of other items.
Are you using standard costing? If you have “version cost price” selected, you may need to have a cost price for that item also specified in that version before you do the calculation.