Product Indirect Cost(Overhead)

I think here is a problem in item card,the product standard cost include direct labor and direct material cost only. because exclude product indirect cost,the profit is higher then actual one. how to solve the problem? must add new field for the indirect cost and update the cost calculate arithmetic? or exist simple solution for the problem,does it? thanks Peter

Hi Peter Have you looked at the Indirect Cost % field on the item card?


Here you can enter a percentage which corresponds to the indirect costs (freight and warehouse handling, for example) associated with the purchase of the item. Do not enter the percent sign. For example, if the indirect cost % is 5.5%, enter 5.5. The contents of this field will be copied to purchase lines and item journal lines and will be used to calculate the value in the Unit Cost (LCY) field on a purchase line and the Unit Cost field on an item journal line. Unit Cost (LCY) = Direct Unit Cost * (100% + Indirect Cost %) Unit Cost = Unit Amount * (100% + Indirect Cost %) Attention When you use indirect cost % on a purchase line or an item journal line, the direct unit cost differs from the unit cost, and when you post the line, the posted item entry will also have a unit cost different from the direct unit cost. This will cause a discrepancy in the general ledger because: when you post the line, the purchase in the general ledger will be registered at the (new) direct unit cost; but when you later select the Main Menu, Inventory, Periodic Activities, Post Inventory Cost to G/L, the inventory valuation uses the unit cost. You can use the Inventory - Cost Variance report to see whether there are discrepancies. If so, you can correct or apply these discrepancies by manually posting G/L entries. You cannot use the Indirect Cost % field when the costing method is Standard.

Steven, it is very right,it is right what I want,thanks [8)][8)]