Fixed and Variable Cost

Finance and Operations/AX Developer Forum
1

Dear All,

In the Inventory management —> setup — > Cost Groups, we have field named Behaviour with enum values

'fixed cost ’ and ‘variable cost’.

In my testing demo the both seems to be same and found no difference.

Can u please tell me the difference.

Thanks

2

Have a look at the costing sheet and how these interact with production costing. Essentially fixed costs are that no matter what quantity you make, whilst the variable moves with the quantity per as it is a unit.

3

Hai Adam Roue,

I viewed costing sheet and there are both fixed and variable cost defined.

My example:

I defined the standrad cost for an item ‘A’ as 100.

I included this item ‘A’ as a bom line for Item ‘B’.

The fixed cost and variable cost defined as 10%.

But after bom calculation the results are same even if the quantity are increasing.

Thanks

4

It will all depends upon how you have defined the indirect elements and how the calcualtion is created - are you seeing any indirect costs or seeing them but they do not alter - what is the indirect cost type node set to - surcharge or rate?

5

Hai Adam,

Those are defined as surcharge with 10% in the costing sheet.

I have 1 bom with cost $120:

( Material cost: 100

Fixed cost: 10% = 10$

Variable cost 10%: = 10$ = Total cost: 120 )

Now if i produce 2 Boms then cost should be $230 but showing as $240.

I think the fixed cost should attach only once for one single BOM but attached twice for every single Boms. It seems to be variable cost same as fixed cost.

Thanks

6

What calculation have you attached the variable cost to in the costing sheet. I am presuming the variable cost is NOT an item in the BOM.