Help me understand cost and price calculations

Our company is moving to AX later this year (from SyteLine) and boy I’m having a time trying to figure things out. Just a little confused by all of the places that item costs and prices are stored. Please bear with me.

  • On the Released Products form, there are places for Purchase Price, Sales Price, and Cost Price. Where do these come from?

  • What does the Item Prices form control? Where does it get its data from? The costing version?

  • Is the Costing Version only for standard costing setup, or can it calculate the sales price in an average costing environment?

I’m trying to determine how much of this we need to even worry about setting up, considering we are average costing.

The fields on the item record are manually entered, or if the update flags are ticked will be updated by the system at the appropriate transaction, i.e. update purchase cost is ticked and the invoicing of the PO updates the cost.

The invoiced entries fo into the item prices form, and will be referenced on teh next PO, as an example.

No the costing version is not just for standard because you can add cost categories and overheads into this for the costing sheet, but you do not need to populate it with costs, but you could, and you could populate it with sales prices, but this depends in part on teh settings in the version.

The best way to decide this is to get your partner in and have them discuss this with you on the basis of them knowing your business and requirements.

Thanks for the reply Adam. That makes things a little clearer. Does the sales price model calculate the sales price on the item record or does that go into the costing sheet?

We are in the process of getting a partner up and running. I’m kind of jumping the gun on my research because our conversion to AX comes as a result of being merged with another company. They were already on their way to AX and hired a company in the UK; the US sites don’t have one yet (but we are close).

The sales price model calculates it on the item record. The costing version (Costing sheet is the structure) can hold the sales price if you calculate the sales price within the version.

Oh Ok. I’m sure alot of this we’ll find out as we go, is there a utility that has to be run to calculate the sales price on the item record?

It depends how you price.

The costing version will create suggested sales pricing based upon the cost of the items and profit percentage mark ups assigned to each cost group on the item.

Alternatively you can manually enter onto the card. Or you can create trade agreements, or you setup a sales price model on the item card and a basis for this and on the entry of the basis the sales price is calculated. If you then update the purchase/cost price on the item then on the posting of an invoice the cost is updated and so is the sales price.

Adam,

What if I want to update Active price with last Fifo Cost price…is ther any solution

Hardik Patel

Well theoretically it already does this. Take a look at a FIFO costed item and look at the Price button on the item card, they are not in the costing version but it retains the last active price, it then applies FIFO of course to COGS. It depends upon so many settings to be honest, but in theory if you have it setup the last FIFO cost price is your current active price, but then it will be ignored when finance FIFO is applied.

i am asking about Item Price card,

System do not apply same fifo Price to Item Price card as active…

System do save Cost price on Item card (On hand card) but once stock is “0” system make this cost price = 0

when it make latest cost price = true, system give me active price = last transaction cost,

Financial cost is must in my case,

hardik patel

You would need to provide further information, you asked about the cost price, now it is the price, so are you using contribution ratio or are you asking to pick this up in teh price calculation?