Last direct cost in item table

Hi all

the defintion of Direct unit cost is the following :

The program automatically copies the latest direct unit cost from the Direct Unit Cost field in the Purchase Line table when you post an order as invoiced. If you use journals, the program copies the direct unit cost from the Unit Amount field on item journal lines of the Purchase entry type.

But …

Is right when we do postive Entry type in item journal and post it ------> then it will write the the unit cost from item journal to the item card ( direct cost ) . EVEN IF the cost in the item journal for postive entry is average cost …

Is this normal ? IF this is nomal can any one explain why ? and if not please can you guide me why ?

thank …need an urgent help

Well I am not an accountant, and I probably do not need to be to talk about this, but the last direct unit cost should be the last cost of the item. I am not really bothered how it gets in, but just that the last cost is written to that field. The help is wrong, it may have been the intention of Microsoft to make it work this way but it did not in 4 and does not in 2009, which would imply the help is just out of date.

If you are average costed it will not matter, you remove one at the average cost or add one and the average cost remains. Where it is FIFO then average is your best bet when you “find” one or remove one (to be adjusted). However I have always said to users NOT to adjust these fields in these journals and transfer orders, I would prefer them not to be editable, although in some cases there are arguments for this - I would just prefer cost based transactions to be handled through another journal, but that is just my personal opinion, of course if all the users took care and knew the implications there would be no need for change [:D]

Hi Adam ,

thank you , We are using average cost .

So do you think we must keep the item journal to be worked on average cost and must not be changed to direct cost .

OR you advise us to change the average cost on the item journal to last direct cost ?

Adam , the user never do the implication in perfect way and always we have mistakes due to inventory issue .

hoping to advise Microsoft to change the Help because you will slip down after each physical item journal .

And when we have physical journal … Do you advice us to adjust the cost in item journal to the last cost of item or leave the cost for average as it is ?

Thank again Adam , hoping this Topic will be shared by any one having any idea about this isssue .

Hi Jouhayna

Ultimately it depends upon the cost movement, if it is violent then the last direct may cause you issues, but what do you want the system to do? The last direct cost is the last known cost, it is arguably the best cost to use when you book stock in, or remove it, but it depends - yes this will affect the average, but lets face it you just found some stock - what do you want it to do? The system does not know whether to use the last direct cost or not, and therefore plumps for the average cost. I would recommend just taking the average cost, do not change it on the item journal, this way leads to more and more issues.

Adam ,

Great , i understand that yiou advise me to use direct cost … but I don’t understand this …

{you have said that :

I would recommend just taking the last direct cost, do not change it on the item journal, this way leads to more and more issues. }

How can id od this ? if the item journal is taking the unit cost = to average cost ,------> what do you mean in ( do not change it on the item journal)

thank you adam to illustrate



Please I need more calrification about this fact ?







Purchase











The field shows the last direct cost for one unit of the item on the journal line.



Sales:



The field shows the unit price for one unit of the item on the journal line.



Positive Adjmt.:



The field shows the unit cost for one unit of the item on the journal line.



Negative Adjmt.:



The field shows the unit cost for one unit of the item on the journal line.



Consumption:



The field shows the unit cost for one unit of the item on the journal line.

this is what written in Navision -------------------->but i cannot understand why navision is writing the unit cost of item journal OF poisitive adjustment to direct cost in item card …

Sorry I meant take the average cost. If you read back my earlier post I said if you add or take one at average using average you are making no difference to the costing, and how could you really? I would not change it to the last direct cost!

Okay

It writes the cost from a positive adjustment to the “last direct cost” field because it is the “last direct cost”. It takes the unit cost which is the average as you are “magically” finding stock, so it takes the best cost it can. There are arguments for either cost to be taken, but MS chose the average cost, which is probably the best, and as it is your costing method you should be fine with it.

If you DO NOT want the last direct cost updated for a valid reason you would need to modify the system to achieve this.

Thank you adam