Why the item cost is not updated when doing an item charge assignment upon purchase order. Scenario: Item A direct cost is 100 and item charge is 10. When apply item charge assignment and post the as receive and invoice, the direct cost of the item A is still 100? Why?

did you apply the item charge to the according purchase line (type item)?

Yes of course.

what is the amount in the customer ledger entry (and the detailed customer ledger entry)? it should be -127.60 (= - ((100 + 16) + (10 + 1.6)) with a VAT of 16%.

what are the value entries?

Because the “Direct Cost” is 100.

Nest time you purchadse that itam, the Direct Cost will probably be 100 + 10 in charge, not 110 + 10, right?

The extra 10 is charge only.
And as a charge in his case it does affect the Unit Cost (item value).

It is as it is supposed to be. [:)]


Please check inventory setup in WH module.

If Automatic cost posting <> Always

system will not update item charge to unit cost .

if then you run the Adjust cost item entries report with “Post to G/L” tick mark.

Now item charge added to item card.

NOTE: Assume you have applied item charges properly.


Generally Item cost is updated after the Batch job is run. But it updates the unit cost and the not the last direct cost. In purchase order direct unit cost is updated from the last direct cost from the item master which is nothing but the base purchase price latest.

Anfinnur already put it straight in his answer above, an he is absolutely correct.

@Tongekz: You must understand the difference between DIRECT cost and many INDIRECT costs that may or may not apply to each individual transaction of this Item or lot of Items. As in your case, the charge was 10 this one time, but in other transaction the same Item may have Freight = 10, Customs tax = 7, and so on, another transaction may have no additional indirect costs linked at all.
Your accountant may explain this to you in detail in case my post still leaves questions to you.

Thanks for your replies Guys! I have no more confusions in this discussion.

Thanks Anfinuur, Modris, Ashoka and Narayan.